US president Donald Trump is set to sign an executive order on Thursday pointing to federal bank regulators to identify and fine financial institutions engaged in “Deban.”
According to To Bloomberg on Thursday, citing an old White House officer, regulators are required to review the complaint data, while financial institutions under the small business administration’s perspective will be asked to try to restore clients unlawful who have rejected banking services.
Debanking has become a major concern for some political groups, arguing that businesses such as gun manufacturers and fossil fuel companies have rejected banking services for ideological reasons.
It is also a common complaint to crypto companies. During the administration of former President Joe Biden, allegations have emerged a new initiative called “Operation Chokepoint 2.0“Some believe it is an attempt to drive crypto businesses on the coast during the 2022 Bear Market.
https://www.youtube.com/watch?v=ddvtoz5kqt4
Despite changing tone under the Trump administration, Debanking allegations continued.
According to Bloomberg, the Executive Order will teach regulators to remove the “Reputational Risk” category from guidance and training materials. Critics say the category was used to not fairly target crypto companies.
Related: From debanking to a breed of banking arms: the increasing stablecoins
Banks group tries to block crypto bank applications
While the Trump administration strives to end Deban, a group of powerful bank associations attempt to hinder various crypto companies, including Ripple, from obtaining banking licenses.
According to In a letter to the Currency (OCC) Comptroller’s office dated July 17, the American Banking Association, Consumer Bankers Association, the National Bankers Association, America Unions and Independent Community Bankers of America seek to hinder banking applications from four digital asset providers, including Ripple and Fidelity.
In their letter, the associations argue that “there are significant policies and legal questions as to whether applicants’ proposed business plans involve the types of assurance activities conducted by National Trust Banks.” In addition, associations claim that the “public part of these applications does not allow for significant public investigation.”
Ripple, the creators of cryptocurrency XRP (XRP) Applied for a banking license on July 2. The application came days after the circle, the creator of Stablecoin USDC (USDC), filed to create a National Trust Bank to manage Stablecoin reserves.
Applications feature a growing overlap between traditional financial institutions and native crypto companies, competition in the financial service industry has intensified.
Stablecoin companies, in particular, have introduced new forms of payment, which can communicate with the infrastructure provided by traditional banks and credit card companies. The Genius Act, a US bill to repair stablecoins and their issues, was signed in law on July 18.
Magazine: Legal Panel: The XRP Win leaves Ripple A ‘Bad Actor’ without Crypto Legal Precedent Set
