Most cases of debanking in the United States are not the result of independent decisions by financial institutions, but rather stem from direct or indirect government pressure, according to a new report published by the Cato Institute.
The study challenges the widespread belief that banks primarily close accounts due to political or religious bias. Instead, it argues that regulatory pressure and government influence play a far greater role, particularly when it comes to cryptocurrency-related businesses.
According to the report, regulators have increasingly relied on informal tools such as risk guidance, supervisory pressure, and confidential communications to discourage banks from serving certain industries. Cryptocurrency firms, in particular, have been disproportionately affected, often finding themselves labeled as “too risky” without clear legal prohibitions against their activities.
The report categorizes debanking into three distinct types. Political or religious debanking involves account closures based on beliefs or affiliations. Operational debanking occurs when banks end relationships for standard business reasons such as profitability or compliance costs. Government debanking, the most concerning category highlighted by the study, occurs when authorities pressure banks to cut off clients through formal or informal means.
Public records reviewed by the Cato Institute reveal repeated instances in which government officials have intervened to influence how banks manage customer relationships. These interventions may take the form of direct actions such as court orders or official letters, or indirect pressure through regulations that raise compliance costs and legal risks.
Cryptocurrency companies feature prominently in the findings. Many digital asset firms report prolonged difficulty accessing basic banking services, fueling concerns that regulators are attempting to limit the sector’s growth through back-channel pressure rather than explicit legislation.
One example cited in the report involves the Federal Deposit Insurance Corporation, which sent letters urging banks to pause crypto-related activities without offering clear guidance or timelines. According to the study, such actions effectively forced banks to terminate accounts while avoiding formal bans.
Executives across the financial and crypto industries have echoed similar concerns. Jamie Dimon, chief executive of JPMorgan Chase, stated that his bank does not close accounts based on political or religious views, though he acknowledged that pressure from both major U.S. political parties has influenced banking decisions.
At the same time, Jack Mallers, the CEO of Strike, said that JPMorgan shut down his personal accounts without explanation. Executives at other crypto firms, including ShapeShift, have made similar public claims.
The report notes that executive actions under Donald Trump and leadership changes at agencies such as the Securities and Exchange Commission have addressed some immediate concerns. However, it argues these measures do not provide a lasting solution.
According to the Cato Institute, meaningful reform must come from Congress. The report urges lawmakers to amend the Bank Secrecy Act, eliminate reputational risk regulations, and remove secrecy provisions that prevent public scrutiny of government pressure on banks. Without legislative action, the study concludes, federal agencies will continue to wield disproportionate influence over who can and cannot access the U.S. banking system.
