A new executive order signed by President Donald Trump tasks federal regulators with tightening fraud screening and limiting credit lines for undocumented immigrants — a move policy experts say could push millions of people out of the traditional banking system and toward cryptocurrency alternatives.
On May 19, Trump issued the directive "to restore integrity to America's financial system." Framed as a national security measure, the order instructed agencies including the Treasury Department to consider new rules tightening oversight on fraud screening and risk mitigation when extending financial services to undocumented immigrants.
"Gaps in customer identification practices have allowed terrorists, drug traffickers, money launderers, and other criminal networks to exploit U.S. financial institutions to move illicit funds and evade law enforcement," the White House stated in an accompanying fact sheet.
The order draws striking parallels to a controversy that galvanized the crypto industry during the Biden administration — an alleged coordinated effort dubbed "Operation Chokepoint 2.0," in which financial regulators were accused of pressuring banks to cut ties with crypto firms. That suspected scheme prompted congressional investigations and the release of internal regulatory documents.
Trump's own family has cited debanking as a catalyst for their entry into the crypto space. Since World Liberty Financial was established in 2024, Eric Trump and Donald Trump Jr. have pointed to difficulties with banks as a driving force behind the venture. At a conference last year, Trump Jr. said, "We got into crypto because — out of necessity — we were debanked."
"It's pretty cruel to deprive someone of access to financial infrastructure entirely, or force them to utilize cash, shadow banks, or fringe infrastructure, which might not be safe or credible," he added. "And that extends to folks that are here in the country illegally."
Policy experts warn that the executive order creates an uncomfortable tension: the administration's stated goal of protecting American financial institutions from unverified risks conflicts with the crypto industry's own high-profile campaign against debanking.
Some analysts predict that undocumented immigrants will increasingly turn to crypto as an alternative, while others may rely on organized crime networks — such as cartels — to remit money home, given those groups offer deeply rooted and widely known systems for moving funds.
"People are going to have their accounts shut down, but many more people are likely going to view the financial system with fear or hostility, and they're going to see alternatives as a lifeline or an escape hatch," one policy expert testified before the House Financial Services Committee last week. "It's basically painting the banking system as a hostile place."
Those concerns have found bipartisan resonance. Rep. Tom Emmer (R-MN) has long argued that financial surveillance erodes civil liberties, a view echoed at the recent hearing by Rep. Juan Vargas (D-CA), who said, "The government is surveilling too much."
Stablecoins — digital assets often pegged to the U.S. dollar — are among the tools that could see increased use. The executive order specifically directed the Treasury to craft guidance examining the use of "peer-to-peer payments platforms to facilitate 'off-the-books' wage payments."
Bitcoin ATMs represent another avenue, allowing customers to exchange cash for cryptocurrency with minimal documentation. The kiosk sector has faced its own turbulence, however: Bitcoin Depot shut down 9,000 U.S. kiosks after filing for Chapter 11 bankruptcy earlier this month.
Critics caution that pushing people toward these alternatives carries real risks. Unlike regulated banking products, crypto platforms offer no uniform set of consumer protections — including, in some cases, the ability to reverse payments within a 30-minute window with no questions asked. "This is exactly the kind of shadow banking system that we've designed remittances to stay out of, rather than pushing people into," one expert warned.
Analysts note that stablecoins have already seen meaningful adoption in regions where banking access is unreliable, including Sudan and Nigeria. Since the September 11, 2001 attacks, banking rules have tightened considerably, and many immigrants have either obtained proper documentation or lost access to financial services altogether. "The number of people who have an irregular immigration status and bank accounts must be small," one researcher observed. "Do you really want to waste so much resources going after a few people?"
The order arrives as banking regulators are already shifting course. Last month, agencies including the Office of the Comptroller of the Currency removed reputation risk as a supervisory tool — a change welcomed by the crypto industry.
Some observers draw a line between Trump's current order and earlier government overreach. During the Obama administration, the original Operation Chokepoint targeted politically disfavored but lawful industries, including gun dealers and payday lenders. While some analysts are reluctant to label Trump's immigration crackdown "Operation Chokepoint 3.0" — because it targets individuals rather than legal businesses — they warn that expanding government oversight sets a dangerous precedent regardless of which party is in power.
"I think conservatives should worry about this as well, even if it seems like it's sort of serving our short-term goals," one venture capital analyst cautioned. "Trump is going after illegal immigrants today, but what happens in a Democratic administration?"
Why it matters
Peer-to-peer payment platforms and stablecoins are explicitly named in the order's directive to the Treasury to craft new guidance — meaning these tools are already in regulators' sights, not merely at theoretical risk.
Pushing unbanked populations toward less-regulated alternatives such as Bitcoin ATMs and crypto wallets removes the consumer protections — such as fraud recourse and deposit insurance — that traditional banking provides.
The order creates a structural parallel to the crypto industry's own debanking grievances, potentially complicating the industry's political messaging as it simultaneously benefits from and criticizes government-driven exclusion from banking.
Bipartisan concern about financial surveillance — voiced by both Republican and Democratic lawmakers — suggests the order's long-term policy consequences extend beyond immigration enforcement.
