| Key Points: – Federal Reserve proposes removing “reputation risk” from bank supervision criteria. – Move aims to curb crypto debanking linked to Operation Choke Point 2.0. – Supervisory focus shifts from perception-based tactics to core safety-and-soundness standards. |
The Federal Reserve advanced a proposed rule and opened a 60-day comment period on bank supervision that could curb crypto debanking tied to so-called Operation Choke Point 2.0, according to Coingape. The step targets examiner reliance on “reputation risk.”
The draft would codify the removal of “reputation risk” from supervision, a rationale critics say fueled pressure to exit lawful crypto clients, as reported by Cointelegraph. In practice, the change aims to constrain perception-based supervisory tactics while leaving core safety-and-soundness standards intact.
What the Federal Reserve crypto debanking proposal changes
If adopted, the proposal would re-center exams on measurable risks, capital, liquidity, AML/BSA/OFAC, vendor oversight, and legal exposure, rather than reputational optics. Banks could still decline relationships where documented risks exceed tolerance. Leadership at the Federal Deposit Insurance Corporation has likewise criticized opaque debanking practices, according to CryptoSlate.
Supervisory leaders have also emphasized that customer selection belongs to banks, within law and policy, not to examiners. Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, said: “Banking supervisors should never, and will not under my watch, dictate which individuals and lawful businesses a bank is permitted to serve.”
The timing remains procedural. A final rule could follow the 60-day comment window and subsequent review; until then, existing compliance obligations continue to apply across BSA/AML, sanctions screening, liquidity risk, and third-party oversight.
At the time of this writing, Coinbase (COIN) recently traded around 157.19 in overnight activity, based on data from Yahoo Finance. Market tone may influence how banks calibrate risk appetite during the comment period.
FAQs: crypto debanking, timelines, and access to payments
Will banks be required to serve crypto companies?
No. The proposal would not mandate onboarding. Banks would apply safety-and-soundness, BSA/AML, sanctions, liquidity, and legal criteria, and could decline relationships based on documented risk.
What are ‘skinny master accounts’ and could they expand access?
They are limited-access Federal Reserve accounts proposed to give eligible fintech and crypto firms basic payments connectivity. If adopted, they could broaden access while imposing strict risk controls.
Disclaimer:
The information provided on AiCryptoCore.com is for educational and informational purposes only and does not constitute financial, investment, or trading advice. Cryptocurrency investments involve risk and may result in financial loss. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
