- Crypto debanking issues persist despite perceived regulatory easing under the Trump administration.
- FDIC reform is urgent, as outdated policies hinder crypto integration into banking.
Despite initial optimism surrounding pro-crypto policies in the Trump era, recent developments have cast doubts on the administration’s stance.
While regulatory enforcement against major crypto firms appears to be easing, the broader financial ecosystem remains largely unchanged.
Caitlin Long has a different perspective on Trump
According to Custodia Bank CEO Caitlin Long, the U.S. government has made no real progress in addressing crypto debanking issues since Trump’s return to the White House.
Speaking at ETHDenver on the 28th of February, Long highlighted that, despite the perception of a more favorable regulatory climate, federal banking agencies have yet to reverse their anti-crypto guidance.
This growing disconnect between expectations and reality has sparked concerns within the industry, raising questions about whether meaningful policy shifts will materialize.
“It is still presumed unsafe and unsound for a bank to touch a digital asset even in a de minimis amount. That is going to change, no doubt, but Trump hasn’t proposed [anything] yet.”
Trump’s recent move sends shockwaves
This development follows a brief recovery from the shockwaves caused by Donald Trump’s tariff announcements on Canada and Mexico and also on the European Union, signaling a more aggressive trade policy.
Amid this economic uncertainty, Long has called for urgent reforms within U.S. financial institutions, particularly the Federal Deposit Insurance Corporation (FDIC).
She emphasized the need for new leadership at the FDIC, arguing that under Martin Gruenberg’s 15-year tenure, the agency has resisted adapting to technological advancements.
“This is why the banking system is so backwards in this country, because for the last 15 years, we’ve had somebody who isn’t interested in any change.”
Hence, without a shift in approach, the crypto industry may continue to face institutional barriers despite broader regulatory easing.
What’s more?
For those unaware, following Martin Gruenberg’s departure on the 20th of January, Acting Chair Travis Hill now leads the FDIC, but concerns over past regulatory actions remain.
Gruenberg was widely accused of spearheading “Operation Chokepoint 2.0,” an alleged federal campaign aimed at cutting off crypto firms from banking services.
Therefore, while the SEC has dramatically reversed its stance on crypto, Caitlin Long believes a similar shift is still needed in banking regulations.
She also advocates for the swift passage of stablecoin legislation but stresses the importance of strong consumer protections, particularly ensuring banks maintain adequate cash reserves.
In conclusion, she put it best when she said,
“The average bank in the United States right now holds 8 cents in cash against every $1 of demand deposits… That’s fundamentally unstable and fundamentally susceptible to a bank run.”
