- Fed scraps reputational risk assessments, a change seen as boosting banking access for crypto businesses.
- Federal agencies are increasingly removing subjective risk metrics to modernise supervision.
- Crypto industry leaders see the move as progress toward ending discriminatory banking restrictions.
The US Federal Reserve (Fed) has removed the concept of “reputational risk” from its formal bank supervision programme, a decision that could ease access to financial services for crypto firms. The policy change was confirmed on 23 June 2025 in an official statement by the Federal Reserve Board.
The Fed has begun reviewing its examination manuals and other supervisory materials to remove all references to reputational risk, replacing them with more specific language where appropriate. It will also train its examiners and work with relevant federal bodies to ensure consistent implementation across the banking sector.
This change does not alter the Board’s expectation that banks maintain strong risk management to ensure safety and soundness and compliance with law and regulation
The US Federal ReserveWhile reputational risk will no longer be part of formal supervision, the Fed reaffirmed that banks must still operate safely, soundly and in compliance with the law. The change also does not prevent banks from using reputational considerations internally.
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have both also ended reputational risk assessments in their bank examination. This marks a coordinated regulatory trend between agencies, signalling a broader shift away from subjective supervisory metrics that were seen as obstacles to financial innovation, especially in the digital asset space.
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Crypto Sector Welcomes the Move
The move has been met with approval from pro-crypto policymakers and industry figures. US Senator Cynthia Lummis described it as a “win” on X, stating that the reputation risk policies had “assassinated” digital currency businesses. Custodia Bank’s Caitlin Long viewed it as progress towards ending discriminatory practices like debanking.
Debanking has become a major concern for crypto firms, which report widespread difficulty maintaining banking access due to perceived reputational concerns. These issues intensified after FTX’s downfall, when regulators and the Biden administration were accused of actively discouraging banks from serving digital asset clients.
The alleged strategy, referred to by critics as “Operation Chokepoint 2.0,” is viewed as an unofficial campaign to marginalise the crypto industry by limiting its ability to interact with the traditional financial system.
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