Long says crypto debanking still an issue under Trump

Custodia Bank CEO Caitlin Long stated that the U.S. government has taken "nothing" to address crypto debanking issues since President Donald Trump's return to the White House.

Long spoke at ETHDenver on Feb. 28, 2025, noting that despite a "perception" of loosening regulations, federal banking agencies have not overturned anti-crypto guidance.

"It is still presumed unsafe and unsound for a bank to touch a digital asset even in a de minimis amount," Long said.

She added that she expects this to change, but Trump has not yet proposed anything.

According to Long, the White House needs to appoint a new chair to lead the Federal Deposit Insurance Corporation (FDIC), which she said has opposed evolving with technological change for 15 years under Martin Gruenberg’s leadership.

Gruenberg was replaced by Acting Chair Travis Hill on Jan. 20, 2025.

Gruenberg had been accused of being one of the key orchestrators of "Operation Chokepoint 2.0," an effort to debank crypto companies.

Long acknowledged that the Securities and Exchange Commission (SEC) has shifted its crypto policy and awaits a similar shift in banking regulation.

On January 20, 2025, the SEC established a Crypto Task Force led by SEC Commissioner Hester Peirce to support this new approach.

The SEC also canceled Staff Accounting Bulletin 121 (SAB 121), which required financial firms holding crypto to record them as liabilities.

President Trump issued an executive order titled “Strengthening American Leadership in Digital Financial Technology” on January 23, 2025.

This order aims to support "the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”

The order revokes Executive Order 14067 and rescinds prior Treasury policies, emphasising regulatory clarity, financial inclusivity, and the protection of blockchain-based activities.

It also directs government agencies to make it easier for crypto companies to open bank accounts in response to claims of "debanking."

Long hopes for stablecoin legislation with stronger consumer protections, ensuring banks hold cash reserves.

"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," she said.

Long advocates for stablecoin issuers to hold cash to back their liabilities to protect consumers, citing the Silvergate Bank collapse.