Ahead of tonight’s grand unveiling of what Beijing wants the world to think about its economy, the market was active with Gold soaring at the China open for the third day in a row…

…and the Yuan fix notably lower again…

Ugly yuan fix: PBOC set CNY reference rate at 7.2133, much weaker than yesterday’s 7.2096 and the weakest since Sept 2023, approaching weakest on record pic.twitter.com/XKjcn2Mwf7

— zerohedge (@zerohedge) April 16, 2025

Ahead of the GDP print, we saw both new and existing home prices released by the statistics bureau for March showing price drops have slowed on a month-on-month basis…

• China March New Home Prices Fall 0.08% M/M

• China March Existing Home Prices Fall 0.23% M/M

Of course, tonight’s data tsunami is pre-Liberation Day Tariffs so no excuses (aside from the 10% tariffs that Trump put on China at the start of February).

However, GDP was expected to show the economy slowing ahead of the tariffs given March’s unevenness.

In reality, it didn’t… China GDP growth beat expectations, rising 5.4% (+5.2% exp)…

The growth was in line with China’s growth rate in the fourth quarter and exceeded Beijing’s full-year growth target for 2025.

In the first quarter China’s trade surplus was over $270 billion, just below the record in the final three months of last year and almost 50% larger than a year ago. The record surplus last year of almost $1 trillion drove a third of China’s growth and the boost last quarter is likely to have been large.

Beijing has set a target of 5 per cent growth for this year and has backed this up with pledges to increase stimulus measures, setting a record budget deficit target for the central government.

And just like the GDP figure, the rest of the data beat (or met) expectations too

• China Retail Sales BEAT +4.6% YTD vs +4.3% exp vs +4.0% prior

• China Industrial Production BEAT +6.5% YTD vs +5.9% exp vs 5.9% prior

• China Fixed Asset Investment BEAT +4.2% vs +4.1% exp vs +4.1% prior

• China Property Investment MEET -9.9% vs -9.9% exp vs -98% prior

• China Unemployment BEAT 5.2% vs 5.3% exp vs 5.4%$ prior

Presumably these much better than expected data are due to tariff front-running.

“The most pleasant surprise is retail sales which shows that consumption subsidies are working,” said Michelle Lam, Greater China economist at Societe Generale SA. 

“Industrial production was a beat but understandable after the strong export data. But that’s all in the past now.”

China is the world’s largest importer of oil, natural gas and coal, and Beijing has been putting pressure on energy firms in recent years to boost output and reduce the nation’s dependency on imports. 

Diggers and driller responded in March, with output rising 9.6% for coal, 5% for natural gas and 3.5% for crude oil. Output increases in coal and oil are particularly higher than expected.

Of course, it’s what happens next that really matters as US tariffs on China are now high enough to wipe out Chinese shipments to the US, according to Bloomberg estimates. 

“Even with temporary exemptions, US duties will still be high enough to crush most of China’s exports to the US,” said Chang Shu and David Qu at Bloomberg Economics.

UBS this week cut its China GDP forecast with the most pessimistic outlook forecast among major banks, predicting the economy will expand just 3.4% this year as US tariffs choke exports.

Goldman Sachs and Citigroup are among global banks that cut their outlook for China in recent days, with most economists doubting Beijing can achieve the official target of about 5% growth this year.

“With the trade war with the US escalating sharply, the economy will face stronger headwinds. We expect policymakers to expedite stimulus,” said Shu and Qu.

The NBS struck a note of caution even as it released the upbeat data, emphasizing the need for greater support for the economy.

“We should be aware that the external environment is becoming more complex and severe, the drive for growth of effective domestic demand is insufficient, and the foundation for sustained economic recovery and growth is yet to be consolidated,” the bureau said in a statement. 

“We must implement more proactive and effective macro policies.”

Beijing is placing high hopes on domestic demand – particularly consumption – to drive economic growth this year, as external pressures mount under Donald Trump’s second presidency.

In a bid to spur spending, leading bodies of China’s state apparatus and the ruling Communist Party issued a 30-point plan aimed at stimulating consumer demand.

Authored by Aaron Gifford via The Epoch Times (emphasis ours),

Several blue states have joined New York in resisting federal efforts to end diversity, equity, and inclusion (DEI) programs in public schools.

Leaders in California, Minnesota, New York, Oregon, Wisconsin, and Washington said they wouldn’t provide a signed statement to the federal government by an April 24 deadline to certify compliance with President Donald Trump’s executive order prohibiting practices such as diversity training, affinity groups by race and gender, preferential hiring practices by race, and classroom curricula that include progressive ideologies such as critical race theory.

The federal correspondence sent to state education agencies asked leaders to report back on behalf of all their school districts. New York was the first state to dismiss the request, and the other states followed suit last week.

“There is nothing in state or federal law—including Title VI—that outlaws the broad concepts of ‘diversity,‘ ‘equity,’ or ’inclusion,’” David Schapira, California Department of Education deputy superintendent, wrote in an April 11 letter to school districts.

States and districts that don’t comply risk losing federal education funding in accordance with Civil Rights law and a 2023 Supreme Court decision banning racial preferences in college admissions, the federal letter states.

It’s unclear where other states stand in this process. The Department of Education informed The Epoch Times that Puerto Rico, a U.S. commonwealth, had complied with the order, but the agency had not reported updates by state.

The New Hampshire Department of Education’s website updates certification compliance by district.

Rural districts in states that oppose the order are caught in the crossfire. Many depend on higher percentages of federal Title 1 funding than urban districts because they serve low-income student populations and don’t have a strong property tax base.

School officials said these districts have DEI statements on their websites in accordance with state laws put in place years ago, but they don’t necessarily engage in affinity groups for minority teachers or students or mandate culturally inclusive instruction practices.

Jaime Green, superintendent of the Trinity Alps Unified district in Northern California, which depends on federal funding to make up for tax-exempt forest land, said he never received a letter from his state’s Department of Education asking him to disclose information about his district in this matter.

“I’m hoping that locally elected board members would be considered in each state’s decision as we believe in local control,” Green told The Epoch Times.

His district’s website does not show any indications of DEI practices that would be outlawed. It lists all current laws for protecting staff and students from discrimination and harassment and also lists the state-required equity policy adopted in 2018.

David Little, executive director of the New York State Rural Schools Association, said rural districts in the Empire State have struggled with severe enrollment losses in the past decade. Most of them rely on state funding based on enrollment, not property taxes or federal assistance, so they cannot afford not to comply with state requirements, such as DEI statements for hiring, inclusionary practices for all students, or mandated Board of Education diversity committees.

“For rural schools, today is all they know,” he said. “You’re trying to educate kids. You’re not running a compliance machine.”

The Franklin Central School District, a tiny rural district in the state’s southern tier region, lists state-mandated policies on its website, including gender-neutral single occupancy bathrooms. Nothing on the site promotes affinity groups for staff or students by race or gender.

By contrast, the two largest school districts in the country have guidelines to implement race- or gender identity-based programs.

The New York City School District website has an extensive page with guidelines “to support transgender and gender-expansive students.” It notes that any student can choose the name, pronoun, and gender they want without parental consent. The Los Angeles Unified School District website includes a Black Student Achievement Plan.

Both national teacher unions, the National Education Association and the American Federation of Teachers, have filed federal lawsuits challenging the legality and constitutionality of the Trump administration’s DEI certification requirement.

At the state level, meanwhile, some legislatures across the country are already considering bills prohibiting DEI in schools, regardless of how Trump’s executive orders play out. That list includes Alabama, Florida, Minnesota, Missouri, Ohio, and Texas, according to the legislation tracker on the National Conference of State Legislators website.

Several states also have bills promoting DEI, including a culturally responsible education mandate in Delaware, an apprenticeship and placement program for teachers of color in Hawaii, mandated “LGBTQIA+” diversity training in Illinois, and required task forces to study and promote diversity in New York State public schools.

Jonathan Butcher, an education policy research fellow at the Heritage Foundation, said it remains to be seen how the Trump administration will proceed after the April 24 deadline; federal agencies may take a closer look at each state and audit individual districts as they did under similar orders for colleges and universities.

“The state has withheld money from districts already,” he told The Epoch Times. “I think the administration is largely within its purview. If a state chose to test this and see how serious [Trump] is, the administration has demonstrated it’s quite serious.”

Butcher said federal education funding, which is mainly limited to aid for low-income and special education students, typically amounts to less than 10 percent of a school district’s revenues.

He doesn’t think it is fair that some state education superintendents announced their decision not to comply without gathering input from all their districts, but at the same time, it should also not be assumed that rural districts, even in red states, intend to comply with the order.

“There are mandated affinity groups that get together during lunch in South Carolina,” Butcher said. “Yes, this is happening in districts of all shapes and sizes.”

Butcher added that the overriding concept—the main reason for the Trump administration’s plan to dismantle the Department of Education—is that states and school districts can make their own decisions. If they choose to maintain DEI practices and forgo federal money, taxpayers who voted for leaders opposing such practices shouldn’t have to pay for them.

Trump previously issued an executive order to facilitate the elimination of the Department of Education, and Education Secretary Linda McMahon has already laid off half the agency’s staff. In addition, the agency’s special education functions for K-12 schools have been moved to the Department of Health and Human Services, and the Small Business Administration will take over student loans.

If states and school districts are able to maintain DEI programs without federal funding, Butcher said, “they didn’t need Washington in the first place.”

The top 1% of U.S. earners paid 40% of federal income taxes in 2022, based on the latest available data.

This share has risen from 33.2% in 2001. 

Meanwhile, the share paid by the bottom 50% of earners fell from 4.9% to 3% over the same period—likely reflecting the growing concentration of wealth at the top, which has boosted tax contributions from high-income individuals.

This graphic, via Visual Capitalist’s Dorothy Neufeld, shows federal income tax revenue by wealth bracket, based on analysis of IRS data from the Tax Foundation.

Breaking Down America’s Income Tax Revenue

Below, we show the share of total federal income taxes paid by wealth tier in 2022:

Americans earning over $663,000, considered the top 1%, paid $854.5 billion in income taxes, the highest share overall.

The average income tax rate for this tier was 26.1%, across more than 1.5 million income tax returns in 2022. Individuals in this bracket paid $561,523, on average, in their income tax filings.

For those falling in the top 5% to 1% of all U.S. earners, income tax revenue amounted to $448.6 billion, the second-highest share. Taxpayers falling into this bracket earned between $261,591 and $663,164 and paid 23.1% on average in income tax.

Meanwhile, the bottom half of earners funded the smallest share of total income tax revenue, with an average income tax rate of 3.7%. These represent earners of $50,339 or less, spanning across 76.9 million American taxpayers.

To learn more about this topic from a global perspective, check out this graphic on top marginal income tax rates around the world.

Authored by Jeremy Portnoy via The Epoch Times (emphasis ours),

Topline: Local residents and environmental advocates have banded together to oppose California Gov. Gavin Newsom’s proposed $20 billion water tunnel in the Sacramento-San Joaquin River Delta, with various groups arguing the project will “make our town uninhabitable”   and have “terrible consequences” for wildlife. 

Key facts: California officials have debated building a tunnel for decades. The current proposal will store rainwater to prepare for potential droughts caused by climate change, and is expected to provide $38 billion in benefits: an increased water supply that would be better protected from natural disasters. In April, the State Water Resources Control Board began holding hearings to decide on granting permits for the project.

Opposition has been fierce. The Associated Press said that the tunnel is “one of the most controversial projects in recent memory.”

Some are afraid of the impact on salmon and other fish in the river delta, which CalMatters says “has collapsed from a once-thriving ecosystem into an aquatic ICU of endangered species and harmful algal blooms.” 

State Sen. Jerry McNerney is worried about the cost. He told CalMatters he believes the tunnel will actually cost $40 billion once they factor in the costs to mitigate the environmental impacts.

Construction will be based in the town of Hood, with a population of just 271. One resident told CalMatters, “This will make our town uninhabitable. There will be so much heavy equipment and traffic and people going through town that the locals will be driven out.”

California plans to address that problem by throwing even more money at it. The tunnel’s price tag includes $200 million in grants to help local communities recover from the impacts of the construction project. 

The tunnel would still not entirely offset the expected effects of climate change. The state believes its water supply will decrease by 22% by 2070, while the tunnel will provide a 17% boost, according to the AP.

There also may be other, cheaper ways to boost the state’s water supply. A new report from the University of California, Los Angeles found that California recycles just 22% of its wastewater. Nearby Nevada recycles 85%, and Arizona recycles 52%.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Critical quote: Barbara Barrigan-Parrilla, executive director of the group Restore the Delta, told Governing.com that “The tunnel is like dropping a bomb on the north delta … There is a body of science out there that shows that you can’t divert more than 25 percent of the fresh water from an estuary and have it survive. And we have been diverting 50 percent and 60 percent regularly now.”

Summary: A $20 billion price tag is shocking for any project, let alone one that not everyone agrees will actually benefit California.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

Authored by Elaine Donnelly via RealClearPolitics,

Former Majority Leader Senator Chuck Schumer recently admitted that he is responsible for confirming 235 “progressive” judges who are “ruling against Trump time after time.”  Activist judges are Schumer’s Plan B.

Article I, Section 8, of the U.S. Constitution empowers Congress to make policy for the military. But as things stand now, unelected, unaccountable federal judges are overruling President Trump’s Executive Orders and arrogating to themselves power to run the armed forces.

Unless the 119th Congress intervenes, President Joe Biden’s radical policies regarding transgender people in the military will continue indefinitely.

Self-Appointed “Supreme Judicial Commanders” Take Charge

President Donald Trump’s January 27 Executive Order #14183, titled “Prioritizing Military Excellence and Readiness,” is one of several calling for an undistracted focus on military warrior ethos, not “political agendas or other ideologies harmful to unit cohesion.” 

Executive #14168 (January 20) defined biological reality – differentiating “sex” from subjective “gender identity” and proclaiming the existence of two immutable sexes, male and female. This EO also prohibited male access to women’s sleeping, changing, or bathing facilities and discontinued use of inaccurate invented pronouns and bureaucratic markers that reflect subjective gender identity instead of biological sex.

The reality-based principles stated above, applied to DoD policies regarding persons having a history of gender dysphoria or identifying as transgender, logically justified orders to revoke President Joe Biden’s Executive Orders and Directives accommodating persons with gender dysphoria or identifying as transgender in the military.

Trump’s EOs and directives restored gender dysphoria to the DoD list of physical and psychological conditions that affect eligibility to serve, and ended Biden-era mandates and subsidies for irreversible treatments and surgeries for “transitioning” purposes that attempt to change sex.

Trump’s Executive Orders also mandated respectful treatment for persons separating with generous benefits due to gender dysphoria, and protected vulnerable children from chemical and surgical mutilation based on “junk science” recommended by discredited “experts” like the World Professional Association for Transgender Health (WPATH).

Lawsuits Filed to Halt Trump Gender Dysphoria/Transgender Policies

A lawsuit titled Nicolas Talbott v. U.S., plus two more, (Shilling v. Trump in Seattle and Ireland v. Hegseth in New Jersey), are challenging the directives and premises behind President Trump’s Executive Order regarding persons diagnosed with gender dysphoria or identifying as transgender.

In the Washington, DC Talbott case, District Judge Ana C. Reyes issued a nationwide preliminary injunction that blocked implementation of Trump’s order.  Judge Reyes, a longtime Democratic/left-wing activist described as the first gay Latina U.S. District Judge, displayed extreme bias in her handling of this case.  Her behavior toward the Justice Department attorney defending the Trump policy was so egregiously hostile, the office of the Attorney General filed a formal complaint. 

Not surprisingly, Judge Reyes’ March 18 opinion in the Talbott case lashed out at Trump’s recognition of only two sexes and concerns about male/female sexual privacy. Her strident rhetoric could be the start of a Plan B campaign of judicial lawfare against President Trump and his efforts to restore sound priorities in our military.

A similar national injunction in the Shilling case, a temporary restraining order in the Ireland case, plus additional adverse rulings expected from other activist judges, could make Biden’s extreme transgender policies permanent while various lawsuits wind their way to an unpredictable Supreme Court.     

Absent Congress Action, Biden Policies Likely to Become Permanent

The 78-page Talbott opinion exploited weaknesses in the government’s case, but Judge Reyes’ intemperate language and obvious bias showed why federal judges should not be making policy for our military.

Among other things, Judge Reyes disregarded Defense Department data on the costs and consequences of Obama-era treatments for gender dysphoria. In 2018, a DoD panel of experts reported to then-Defense Secretary James Mattis that 994 active-duty service members diagnosed with gender dysphoria accounted for 30,000 mental health visits – a 300% increase per capita. 

The Mattis panel’s report also cited long-term studies highlighting the operational and human costs of gender dysphoria, including disproportionately high risks of suicide. 

Why has this data not been updated? Perhaps because Biden’s policy prohibited discussion of problems with the transgender policy without approval from high-level officials.  Now Biden-era officials are praising their own policies before Congress and the courts.

We don’t know whether the Justice Department, representing the DoD, mentioned several empirical studies that have questioned lucrative treatments for gender dysphoria.  A 2025 University of Texas study, for example, reported elevated risks of depression and suicide following “gender-affirming surgery.” 

The Reyes ruling does not mention WPATH, a prominent organization advocating for irreversible puberty blockers and mutilating surgeries for minor children, which has been charged with medical ethics violations.  Nor does the record show consideration of the 2024 Cass Review in England, which questioned the benefits of “sex change” treatments for children.

Even if the Justice Department had presented many recent critical studies in court, the judge probably would have still described Trump’s policy (twice) as “soaked in animus and dripping with pretext.”

Judge Reyes’ over-the-top opinion showed zero concern about operational complications, medical ethics, and overwhelming public opinion against men entering women’s private facilities and athletic teams.  Activist court injunctions that usurp power from Congress and the Executive Branch are about reality-denying transgender ideology, not military effectiveness.

Congress Should Enact Common Sense in Defense Bill (NDAA) for 2026

Years could pass before the issue reaches the Supreme Court, which may or may not hand down a decision favoring the Trump policy. This puts the ball squarely in Congress’ court.

Without principled congressional action, accomplished in a way that can withstand judicial scrutiny, members could be held accountable for not delivering on promises made during the 2024 elections.

It would help to inscribe four essential principles in the National Defense Authorization Act (NDAA) for 2026: Merit as the exclusive basis for personnel actions, a prohibition on non-merit factors such as race in personnel actions, clear definitions of key terms such as “merit,’ “male,” and “female,” and narrow exceptions for operational reasons.

Congress also should dismantle ideological power bases in the Pentagon.  Non-discriminatory practices and common-sense, reality-based measures would support President Trump’s efforts to end woke policies in the military, while reaffirming purposes of the military that some federal judges refuse to respect.

Elaine Donnelly is President of the Center for Military Readiness (CMR), an independent public policy organization founded in 1993, which reports on and analyzes military/social issues. More information is available at www.cmrlink.org.

Nvidia tumbled in afterhours trading after the company said the US government will begin requiring a license to export the company’s H20 chips to China, an escalation of restrictions that the company has publicly opposed.

The government informed Nvidia on Monday that such a license would be in effect “for the indefinite future,” the company said in an 8K filing. The company now expects to report charges of about $5.5 billion during the fiscal first quarter from “inventory, purchase commitments and related reserves” tied to the H20 line, Nvidia said.

On April 9, 2025, the U.S. government, or USG, informed NVIDIA Corporation, or the Company, that the USG requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of the Company’s H20 integrated circuits and any other circuits achieving the H20’s memory bandwidth, interconnect bandwidth, or combination thereof. The USG indicated that the license requirement addresses the risk that the covered products may be used in, or diverted to, a supercomputer in China. On April 14, 2025, the USG informed the Company that the license requirement will be in effect for the indefinite future. – 8K filing

As a reminder, the H20 is a scaled-down chip that was designed to comply with US export regulations and has been Nvidia’s primary AI GPU legally available for sale in China after the H100/A100 were banned.

Bloomberg News reported in January that the Trump administration was exploring such a step. 

NVDA stock tumbled as much as 7% in afterhours trading as the market tried to make sense of this latest escalation in the trade war.

Trump’s tariffs have injected a large measure of chaos into the markets – so much so that JPMorgan sees only four potential off-ramps to right the ship;

(i) Series of Trade Deals – the key being that one or more need to be completed across the G8 with a China deal being the most impactful

(ii) Another Trump Pivot – this could look like a delay/reduction for China to the 10%, perhaps with Trump’s commitment to fostering a business-friendly environment

(iii) A Legal Injunction – about 2 weeks ago a Charles Koch-backed legal group initiated a lawsuit against Trump challenging Presidential authority over tariffs (BBG)

(iv) Congress Passes a Veto-Proof Law – we have seen two initiative with Republicans crossing the aisle to join Democrats in attempting to halt the trade war but, as of now, the 2/3 necessary in both parts of Congress has not been attained.

While (i) is allegedly in the works, and (ii) could happen depending on which way the wind is blowing at Mar-a-Lago, we’ve now we’ve got (iii) in the works – as five companies have filed a lawsuit against the Trump administration over its decision to tariff nearly every country in the world – arguing that Trump has overstepped his authority.

As Jack Phillips via The Epoch Times notes on April 2, Trump announced that he would impose 10 percent baseline tariffs on nearly every country and higher rates for nations with which the United States is at a significant trade deficit. A week later, the president paused the reciprocal tariffs for dozens of countries, but not for China, for which he raised the tariff rate to 145 percent.

The libertarian-aligned Liberty Justice Center filed a lawsuit on behalf of five companies in the U.S. Court of International Trade, alleging that a statute that Trump invoked “does not authorize the President to unilaterally issue across-the-board worldwide tariffs.”

“His claimed emergency is a figment of his own imagination: trade deficits, which have persisted for decades without causing economic harm, are not an emergency. Nor do these trade deficits constitute an ‘unusual and extraordinary threat,’” the group’s lawyers said.

The lawsuit was filed on behalf of alcohol company Vos Selections, sportfishing e-commerce business FishUSA, toy manufacturer MicroKits, pipe manufacturer Genova Pipe, and cycling apparel brand Terry Precision Cycling.

Liberty Justice Center’s senior counsel, Jeffrey Schwab, said in a statement that the president lacks the “power to impose taxes that have such vast global economic consequences.” The plaintiffs argue that only Congress, not the executive branch, can set tax rates.

Trump said in an April 2 executive order that the initial swath of tariffs is needed to bolster national security with regard to supply chains and because U.S. trading partners have engaged in “economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits.”

Trump’s announcements have caused fluctuations in the stock market this month, with indexes dropping before the partial tariff pause. On April 14, the three major stock indexes saw increases. By 3:30 p.m. ET, the Dow Jones Industrial Average was up by more than 400 points, while the Nasdaq increased about 1 percentage point.

On April 13, Trump said that he would be announcing tariffs on imported semiconductors over the next week, adding that there would be flexibility with some companies in the sector.

“We wanted to uncomplicate it from a lot of other companies, because we want to make our chips and semiconductors and other things in our country,” Trump told reporters aboard Air Force One as he traveled back to Washington from his estate in West Palm Beach.

Trump declined to say whether some products, such as smartphones, might still end up being exempted.

“You have to show a certain flexibility. Nobody should be so rigid,” he said.

Earlier on April 13, Trump wrote in a post on social media platform Truth Social, “We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations.

“What has been exposed is that we need to make products in the United States, and that we will not be held hostage by other Countries, especially hostile trading Nations like China.”

Commerce Secretary Howard Lutnick told ABC News on April 13 that Trump will set up a “special focus-type of tariff” on smartphones, computers, and other electronics within several weeks alongside tariffs for semiconductors and pharmaceutical drugs.

The Trump administration has not responded to the group’s lawsuit in court. The Epoch Times contacted the White House for comment on April 14.

Reuters contributed to this report.

Authored by Aaron Wood via CoinTelegraph.com,

The crypto industry’s inability to access banking services still concerns many industry observers despite recent policy victories.

In past years, financial services firms and banks concerned about fiduciary risk, reporting liabilities and reputational risk often would refuse to offer service to crypto firms — i.e., “debanking” them. 

Legislative efforts in the United States and Australia are attempting to remove these barriers for the crypto industry. In the former, legislators repealed guidelines that made it difficult for banks to custody crypto assets, as well as those stating that crypto carried “reputational risk” for banks. In the latter, the Labor Party has introduced a bill to create a legal framework for crypto, giving banks the clarity they need to interact with the crypto industry.

Despite these tangible efforts, some crypto industry observers say that the crypto’s debanking problem is far from over.

US crypto execs say debanking is still an issue 

The crypto industry has long decried “Operation Chokepoint 2.0,” its nickname for a suite of policies that they claim constrained the crypto industry from growing under the administration of former President Joe Biden. Among these were measures making it more difficult for crypto firms to access banking services. 

The early days of the second administration of President Donald Trump have seen many of these repealed or changed. One of the first was the repeal of Staff Accounting Bulletin 121, which required banks offering custody for customers’ cryptocurrencies to list them as liabilities on their balance sheets — this made it very difficult for banks to justify offering such services.

The administration also appointed a new head of the Office of the Comptroller of the Currency (OCC), Rodney Hood. Dennis Porter, CEO of the Bitcoin-focused policy organization Satoshi Action, told Cointelegraph that under Hood’s tenure, the OCC has already said banks can offer crypto-related services like custody, stablecoin reserves and blockchain participation.

“This opens the door for broader adoption of digital asset technology and custodial services by traditional financial institutions, signaling a major shift in how banks engage with crypto,” he said.

Despite these victories, Caitlin Long, founder and CEO of Custodia Bank, said on March 21 that debanking is likely to remain a problem for crypto firms into 2026.

Long said the non-partisan board of governors of the Federal Reserve is “still controlled by Democrats,” alluding to Democrats’ more skeptical stance on crypto. Long claimed that “there are two crypto-friendly banks under examination by the Fed right now, and an army of examiners was sent into these banks, including the examiners from Washington, a literal army just smothering the banks.”

Long noted that Trump won’t be able to appoint a new Fed governor until January, meaning that, while other agencies may be more crypto-friendly, there are still roadblocks. 

Australia’s Labor Party to create crypto framework

Stand With Crypto, the “grassroots” crypto advocacy organization started by Coinbase that has spread to the US, UK, Canada and Australia, said that “in Australia, debanking is quietly shutting out innovators and entrepreneurs — particularly in the crypto and blockchain space.”

In a post on X, the organization claimed that debanking results in “reputational damage, loss of revenue, increased operational costs, and inability to launch or sustain services.” It also claimed that it forces some companies to move offshore. 

In response to these concerns, the ruling center-left Labor Party in Australia has proposed a new set of laws for the cryptocurrency industry. The changes to current financial services law seek to tackle the issue of debanking in the country’s cryptocurrency industry.

Australia’s Treasury says its new crypto regulations have four priorities. Source: Australian Department of the Treasury

Edward Carroll, head of global markets and corporate finance at MHC Digital Group — an Australian crypto platform — told Cointelegraph that in Australia, debanking decisions were “not the result of regulatory directives.”

“Rather, they appear to stem from a more general sense of risk aversion due to the current lack of a clear regulatory framework.”

Carroll was optimistic about the Labor Party’s proactive stance. The major political parties were “showing a shift in sentiment and a shared commitment to establishing formal crypto regulation.” 

“We are hopeful that this will give banks the confidence to reengage with crypto businesses that meet compliance standards,” he said.

Canada unlikely to relieve crypto firms

In Canada, “debanking remains a serious and ongoing challenge for the Canadian crypto industry,” according to Morva Rohani, executive director of the Canadian Web3 Council.

“While some firms have successfully established relationships with banking partners, many continue to face account closures or denials with little explanation or recourse,” she told Cointelegraph. 

While debanking actions aren’t explicit, financial institutions’ interpretation of Anti-Money Laundering and Know Your Customer regulations “creates a risk-averse environment where banks weigh compliance and reputational concerns against the relatively low revenue potential of crypto clients.”

The end result, per Rohani, is a systemic debanking problem for the digital assets industry.

But unlike in the US and Australia, the Canadian crypto industry may not find relief anytime soon. Prime Minister Mark Carney, whose more crypto-skeptic Liberal Party is surging in the polls ahead of the April 28 snap elections, is himself a crypto-skeptic.

Polls show Carney firmly in the lead. Source: Ipsos

Carney has stated that the future of money lies more in a “central bank stablecoin,” otherwise referred to as a central bank digital currency.

Rohani said that “no comprehensive legislative solution has been implemented” with regard to debanking. “A more structured approach, including mandated disclosure of reasons for account termination and regulatory oversight, is needed,” she said.

Critics claim crypto is “hijacking” the debanking issue

There is another side to the debanking debate, which claims that crypto’s debanking “problem” is a non-issue or a vehicle for crypto firms to get what they want in terms of regulation. 

Molly White, the author of Web3 Is Going Just Great and the “Citation Needed” newsletter, has noted that, in the US at least, crypto firms have claimed to be victims of debanking while lauding Trump’s efforts to end protections for debanking at the same time.

In a Feb. 14 post, White stated that the crypto industry had “hijacked” the discussion around debanking, which contains legitimate concerns regarding access to financial services — particularly regarding discrimination due to race, religious identity or industry affiliation. 

She claims the crypto industry has used debanking as a means to deflect legitimate regulatory inquiries into crypto companies’ compliance efforts. 

Further of note is the fact that Coinbase CEO Brian Armstrong has applauded the efforts of the Department of Government Efficiency (DOGE), with Elon Musk at the helm, to dismantle the Consumer Financial Protection Bureau (CFPB).

One of the CFPB’s responsibilities is to investigate claims of debanking. But when DOGE instructed the agency to halt all work, Armstrong said it was “100% the right call,” in addition to making dubious claims about the agency’s constitutionality.

In the meantime

Whether the industry’s debanking concerns stem from legitimate discrimination or an attempt at regulatory capture, crypto firms are developing solutions in the interim. 

Porter said that, as an alternative to banking services, “many crypto companies have leaned on stablecoins as a primary tool for managing finances,” while others have worked with “smaller regional banks or specialized trust companies open to digital assets.”

Rohani said that this kind of “patchwork of relationships” can increase operational costs and risks and are “not sustainable long-term solutions for growth or to build a competitive, regulated industry.”

Porter concluded that the banking workarounds could actually strengthen the industry’s position, stating that they may “continue evolving into fully integrated relationships with traditional financial institutions, further cementing crypto’s place in mainstream finance.”

The Trump administration is moving to eliminate federal funding for the Corporation for Public Broadcasting (CPB), which supports PBS and NPR, while also cutting billions in foreign aid, according to a draft memo from Office of Management and Budget Director Russell Vought. The New York Post reports the plan would strip $1.1 billion from CPB and $8.3 billion from USAID, pointing to CPB’s “consistent anti-conservative bias” as a driving factor.

The memo, part of a “rescissions” strategy to rescind previously approved funds, was requested by GOP congressional leaders. Once delivered to Capitol Hill, the Republican-led Congress will have 45 days to approve or reject the proposal. White House officials are confident it will pass.

The plan also solidifies foreign aid cuts led by Elon Musk’s Department of Government Efficiency, aligning with efforts to slash federal spending.

“Since day one, the Trump Administration has targeted waste, fraud, and abuse in Federal spending through executive action, DOGE review, and other efforts by departments and agencies. Congress has expressed strong interest in supporting those efforts, and requested the Administration transmit rescissions to the Hill for swift approval,” the memo reads, according to the NY Post. “OMB recommends the Administration respond with two proposals to cut $9.3 billion. The first includes a rescission of $8.3 billion in wasteful foreign aid spending (out of $22 billion) that does not expire in Fiscal Year (FY) 2025. The second is a separate rescission of all Federal funding for the Corporation for Public Broadcasting (CPB) — which funds the politically biased public radio and public television system.”

The memo also highlighted examples of coverage of President Donald Trump, noting that NPR CEO Katherine Maher previously referred to Trump a “fascist” and a “deranged racist.”

Trump has long demanded that NPR and PBS be stripped of federal funding, writing last month on Truth Social: “NPR and PBS, two horrible and completely biased platforms … should be DEFUNDED by Congress, IMMEDIATELY.”

On March 28th, Rep. Ronny Jackson (R-TX) introduced legislation to to eliminate federal funding for NPR and PBS, labeling them “chronically biased” following a DOGE hearing.

“For decades, radical Democrats have funneled taxpayer dollars to NPR and PBS under the guise of ‘serving the public,’ despite both organizations abandoning their founding missions to provide non-biased content and instead promoting the same radical-left propaganda as any other fake news outlet,” Jackson said in a statement. “If these organizations want to push partisan agendas, they do not deserve another dime of federal support.”

Cosponsors of the bill include DOGE Subcommittee Chairwoman Marjorie Taylor Greene (R-GA) and Reps. Jodey Arrington (R-TX), Andy Biggs (R-AZ), Tim Burchett (R-TN), Michael Cloud (R-TX), Mike Collins (R-GA), Neal Dunn (R-FL), Paul Gosar (R-AZ), Troy Nehls (R-TX), Chip Roy (R-TX), Keith Self (R-TX), and Randy Weber (R-TX).

“I’m proud to cosponsor Ronny Jackson’s bill to defund PBS and NPR,” said Greene. “As my DOGE subcommittee hearing showed, these taxpayer-funded PR arms of the Democrat Party don’t deserve the American people’s hard-earned money. NPR and PBS hate President Trump, his supporters, and the majority of Americans who sent us a mandate in 2024. They can hate us on their own dime.”

Submitted by Jim Bovard

On Tax Day, politicians and mainstream media will hector Americans to be grateful for the opportunity to pay their taxes. The Internal Revenue Service website touts a moth-eaten quote from a dead Supreme Court Justice: “Taxes are what we pay for civilized society.” But recent history is the best antidote to groveling in gratitude to the federal agency that commandeers a lion’s share of your income.

The smiley face IRS should have been banished forever after revelations in the years before the 9/11 attacks.

Former IRS district chief David Patnoe observed in 1998, “More tax is collected by fear and intimidation than by the law. People are afraid of the IRS.” In 1996, an IRS instructor in the Arkansas-Oklahoma district was caught on videotape lecturing collection agents on how to treat taxpayers:

“Make them cry. We don’t give points around here for being good scouts. The word is enforced. If that’s not tattooed on your forehead, or somewhere else, then you need to get it. Enforcement. Seizure and sales. That’s our mind set…If you’ve got an assessment, enforce collection until they come to their knees.”  

One confidential IRS document uncovered in 1997 revealed that IRS auditors in the San Francisco region were expected to assess at least $1,012 in additional taxes for each hour they spend auditing a taxpayer’s return. IRS revenue officers ignored regulations and guidelines before seizing property. In one case in the Arkansas-Oklahoma region, the only effort an IRS agent made before confiscating two cars “consisted of driving to the taxpayer’s house, honking his car horn, and noting that no one came out of the house in response,” according to an IRS audit.

IRS agents have been indoctrinated to see taxpayers as a class enemy. This attitude is epitomized by “Culture Bingo,” a game used to train IRS agents and auditors. The American Institute of Certified Public Accountants complained that Culture Bingo and other “economic reality training modules” encouraged examiners to think the worst of taxpayers. Culture Bingo sought to help employees recognize “an IRS organizational culture regarding the audit process.” The game encouraged IRS agents to recognize or practice the following:

• “I use summons to get third party records.”
• “Fraud referrals help an examiner get promoted.”
• “Taxpayers can skim $20,000 and we’ll never find it.”
• “Most taxpayers deposit unreported receipts in their bank accounts.”

After an IRS agent got enough other agents in the class to sign onto his “bingo” card, he shouted out “I’ve got culture!” and the class launched into a discussion of the reasons why these beliefs and practices were true and necessary. One of the most damning “lessons” of the training was the doctrine, “Taxpayers seem to live better than I do.” The American Institute of Certified Public Accountants said of the course materials, “Every ethical issue presented finds the ethical result to be pro-IRS and anti-taxpayer. There is not one scenario where an IRS agent might act unethically against a taxpayer’s interest.”

Culture Bingo was especially perilous to IRS targets because IRS auditors sometimes simply make up income—and then demand that the person pay additional taxes based on the IRS allegation. Bruce Strauss, a private tax preparer who worked for IRS collections for over thirty years, testified to Congress, “The IRS now has the authority to assign additional income to a taxpayer at its discretion, without any basis in fact.” Any IRS assertion about a person’s income—even if there is no evidence to support it—automatically receives a presumption of correctness in the Tax Court and in federal district courts. The IRS can impose crushing legal costs on someone merely by asserting that they owe an extra  $10,000 in income—which the person then must fight and disprove in court.

The federal tax code creates far more pitfalls than Americans realize. During Mark McGwire’s rush to break Roger Maris’s major league home run record, a reporter asked an IRS spokesman what would happen if someone caught the baseball that broke the record and returned it, gratis, to McGwire. IRS spokesman Steven Pyrek announced that “the giver is responsible for paying any applicable tax on any large gift.” If the record-breaking baseball was valued at $1 million, the person who returned it to McGwire could face an IRS bill of $140,000 or more. After a hailstorm of criticism, the agency backed off its interpretation. However, if the case had been less publicized, the donor might well have been gouged.

President Joe Biden sought to expand the IRS budget and IRS power more than any American president in the preceding half-century. Biden sought a new army of IRS agents to hound Americans and corporations to pay far more taxes. The Washington Post reported that “the single biggest source of new revenue in the plan comes from dramatically expanding the clout of the nation’s tax agency.” Slate reported, “Biden wants to fund a massive upgrade to the American welfare state by making the IRS great at audits again.”

In 2022, Congress enacted the Inflation Reduction Act. This Biden-backed legislation boosted the agency’s budget by $80 billion over a decade and authorized hiring 87,000 new IRS agents and employees. “Only 4% of the additional funding will be devoted to improving taxpayer service, while 58% will go to escalating enforcement efforts,” the New York Post reported. Rep. Kevin Brady (R-TX) estimated that the law would result in more than a million new audits per year, including more than 700,000 targeting Americans earning less than $75,000 a year.

The Biden administration and its media allies were outraged at suggestions that vastly expanding the number of IRS agents could result in bad things happening to innocent people. Rep. Thomas Massie (R-KY) observed, “The IRS has never pointed a gun at a billionaire or his employees, so why does the IRS need 87,000 new agents, AR-15s, and 5 million rounds of ammunition? They’re not gunning for billionaires or their bank accounts.” Massie helped publicize a film clip of an IRS recruiting program showing Utah students putting on flak jackets and readying toy guns and handcuffs for a raid “taking down a landscape business owner who failed to properly report how he paid for his vehicles.” (“First they came for the tulip bulbs…”)

President Donald Trump is reportedly seeking to reduce by 50% the number of IRS employees. If that happens, The New York Times fretted, “Americans may have to wait longer to receive refunds or speak with I.R.S. employees in future filing seasons.” Some reductions in staffing have already occurred but it remains to be seen how much cutting will occur.

Regardless of the number of IRS employees, Americans remain in peril thanks to federal tax law, federal regulations, and endless court decisions entitling the IRS to sweeping deference. Unless Congress repeals a hefty stack of revenue laws and nullifies a shelf full of regulations, the IRS will continue to have far too many penalty flags to throw at hapless citizens.