Fed Moves to End Crypto Debanking: Proposes Rule Removing 'Reputation Risk' Barrier

The U.S. Federal Reserve has proposed a new rule aimed at preventing the unfair debanking of cryptocurrency firms and other legal businesses. The key measure involves prohibiting banks from denying services based solely on vague "reputation risk" concerns. This regulatory shift is a direct response to growing complaints from the crypto industry about restricted access to banking channels. The proposal mandates that banks must provide specific, evidence-based reasons for terminating or refusing accounts, moving away from subjective assessments. This initiative, developed in collaboration with the FDIC and OCC, seeks to ensure fair access to financial services for sectors operating within the law, including state-authorized digital asset companies. The rule is now open for public comment, marking a potential turning point for crypto banking integration in the United States.