The Federal Reserve plans to permanently remove the "reputational risk" regulatory requirement, which may alleviate the de-banking dilemma faced by cryptocurrency companies

According to The Block, the Federal Reserve recently announced a proposal to permanently remove the consideration of reputational risk from the banking regulatory framework and has opened a 60-day public comment period.

The proposal aims to ensure that banking regulatory decisions are based solely on substantive financial risks, preventing banks from refusing services due to customers' political views, religious beliefs, or involvement in legal but sensitive industries.

Federal Reserve Vice Chair Michelle W. Bowman stated that she has heard of multiple cases of de-banking, and such discriminatory practices should not exist within the Federal Reserve's regulatory framework. Senator Cynthia Lummis welcomed the proposal, stating that this move will help the U.S. become a global hub for digital assets.