Fed proposes rule to deal with crypto debanking by scrapping 'reputation risk'

CoinDesk

by Olivier Acuna

February 24, 2026

AI-Generated Deep Dive Summary

The Federal Reserve has proposed a new rule aimed at addressing the issue of "crypto debanking," which refers to banks cutting ties with cryptocurrency companies or other businesses deemed politically disfavored. The proposal seeks to eliminate "reputation risk" as a factor in federal oversight, prohibiting supervisors from pressuring banks to sever relationships with lawful customers based on their activities or beliefs. This move comes after instances where major banks, such as JPMorgan Chase, have reportedly closed accounts of high-profile figures like former President Donald Trump and crypto entrepreneurs like Jack Mallers without clear justification. The Fed's Vice Chair for Supervision, Michelle W. Bowman, emphasized that discrimination against customers based on political views or lawful business activities is unlawful under federal law. The proposal aligns with previous actions by the Office of the Comptroller of the Currency (OCC) and the Fed to remove reputational concerns from supervisory frameworks. If finalized, the rule would codify these changes, ensuring that banks cannot be compelled to deny services to customers involved in politically disfavored but lawful activities, including cryptocurrency businesses. The proposal also clarifies that "permitted payment stablecoin issuers" will fall under the Fed's regulatory scope after separate rulemakings are completed. This could have significant implications for crypto-native firms seeking

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Originally published on CoinDesk on 2/24/2026