Prospects for Improved Relations Between the Cryptocurrency Industry and Banks Under the Trump Administration

With just over two weeks left until Donald Trump takes office, there are prospects that the relationship between the cryptocurrency industry and the banking sector, which has been at odds, could change positively.

According to The Block, a cryptocurrency-focused media outlet, TD Cowen predicts that under the Trump administration, banks may see an improvement in their relationship with the cryptocurrency industry.

Jaret Seiberg and the Washington Research Group stated in a report, “Banks have the responsibility to comply with Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) regulations and manage risks such as liquidity and concentration,” adding, “If the Trump administration takes power, it is inevitable that the relationship between traditional finance and the cryptocurrency industry will change positively.”

However, they also mentioned that some banks may still take a cautious stance. They said, “Some banks may still see risks in increasing relationships with cryptocurrencies,” and “this could be targeted by new banks.” Additionally, stablecoins (assets linked to the value of fiat currency) were highlighted as the cryptocurrency sector that banks would be most interested in, as banks hold cash, making them advantageous for issuing stablecoins.

In the U.S., there has been ongoing conflict between the cryptocurrency industry and the traditional financial sector, particularly banks. There have been conspiracy theories suggesting that banks have implicitly enforced cryptocurrency-related sanctions, known as Operation Chokepoint 2.0. Some cryptocurrency figures have claimed that banks have tried to restrict access to traditional financial services for the cryptocurrency industry.

Brian Armstrong, the founder of Coinbase, commented on Operation Chokepoint 2.0, saying, “It actually happened. Unethical and un-American actions occurred under the Biden administration,” and “We are currently gathering evidence from victims through the Freedom of Information Act (FOIA).”