The U.S. Federal Reserve has eliminated “reputational risk” from its bank supervision framework, opting for clearer, financially grounded criteria. The move, announced Monday, is seen as a positive step for crypto firms, which have long faced “debanking”—the termination of banking services due to perceived reputational concerns.
While banks must still maintain strong risk controls, the change could ease regulatory fears and improve access for digital asset businesses. Senator Cynthia Lummis hailed the update as a “win” for the crypto industry, though she emphasized the need for more progress.
The Fed’s decision aligns with similar actions by the OCC and FDIC and follows growing political pressure, including legislation from Senator Tim Scott aimed at banning reputational risk from bank oversight.
The issue gained traction after the FTX collapse when critics alleged a coordinated crackdown on crypto, dubbed “Operation Chokepoint 2.0.” Former President Donald Trump also accused the Biden administration of targeting crypto firms via banking restrictions.
Crypto leaders now hope the updated guidelines will lead to fairer treatment and broader access to essential banking services.
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