U.S. Federal Reserve Moves to Formally Abolish 'Reputational Risk' in Bank Supervision, Addressing the Debanking Issue of Cryptocurrency Firms

On the 23rd, the Federal Reserve Board (FRB) announced the publication of a proposed rule to formally codify the abolition of 'reputational risk' in bank supervision, initiating the collection of public comments. The FRB had previously announced on June 23, 2025, that reputational risk would be removed from the evaluation criteria in supervisory reviews. This new rule proposal solidifies that policy with a stronger legal basis. The proposal specifies that financial institutions are explicitly prohibited from denying banking services to customers engaged in lawful activities, based on reputational risk as mandated by regulatory authorities.