Trump directs Fed to review fintech, crypto rail access

President Donald Trump signed an executive order directing the Federal Reserve Board to review legal, regulatory and policy barriers that may prevent fintech and cryptocurrency firms from accessing Federal Reserve payment systems. The board must submit a report to the president within 120 days.

The order asks the governors to assess the Fed’s legal authority to grant direct access and to explore options for expanding access ‘to the extent permitted by law, subject to appropriate risk management requirements.’ Federal Reserve payment systems provide access to core banking infrastructure, which can speed transfers and reduce reliance on intermediary banks.

Within 90 days, the heads of each federal financial regulator must review regulations, orders and no-action letters that could be preventing fintech firms from partnering with federally regulated institutions, including credit unions, broker-dealers and investment advisers. Regulators must identify guidance, supervisory practices and application processes that could be updated to facilitate innovation and note rules that could be amended to streamline applications for bank and credit union charters, deposit or share insurance, and other federal licenses for eligible fintech firms.

Trump wrote in the order that ‘The United States is a global leader in financial innovation, driven in part by the rapid growth of financial technology and fintech firms’ and said federal rules should allow integration of digital assets and new technology into traditional financial services and payment systems.

The review follows reports from fintech and crypto firms that they have had difficulty obtaining and keeping bank accounts and access to payment rails. Some firms lost access to banking services in incidents described by industry participants as debanking and linked by critics to what they call ‘Operation Chokepoint 2.0.’ The order cites a study by the Cato Institute that found many U.S. political debanking cases followed government pressure rather than banks’ independent policies.

Background material in the order notes that national bank trust charters permit fiduciary services such as trust administration, custody and asset safekeeping. In December, the Office of the Comptroller of the Currency gave conditional approvals to several national trust bank applications tied to digital assets, including First National Digital Currency Bank, Ripple, BitGo, Fidelity Digital Assets and Paxos.

Federal agencies now have set deadlines to report on possible regulatory adjustments and on the Fed’s authority and options for direct access to payment systems. The executive order instructs regulators to consider appropriate risk-management measures if access is expanded.