Fed cleared a big crypto roadblock

The US Federal Reserve just made an epic move. They quietly yanked reputational risk outta their bank supervision playbook.

The thing is, the Fed’s been holding crypto firms hostage behind this vague, feel-good excuse for years.

But now? They’re focusing on real, cold hard financial risks instead of some fuzzy image worries.

Don’t touch crypto?

Picture this, banks have been ghosting crypto companies like that one weird guy in the office who nobody trusts.

Why? Because the Fed said, hey, you gotta watch out for reputational risk. Translation? Don’t get involved with these crypto crowd, or you might catch a bad name.

It’s like being told not to sit with the cool kids because your lunchbox looks suspicious. Ridiculous, right?

This change, announced just this Monday, strips that out of the official supervision guidelines.

The Fed’s saying, they still want banks to be safe and sound, but don’t use reputational risk as a weapon to shut crypto out.

Banks can still think about it internally, sure, but it won’t be a Fed-enforced rule anymore. That’s a big deal.

Just in time!

Why now? Well, lawmakers and crypto insiders have been screaming about this debanking nonsense for years.

Remember the FTX collapse in 2022? That disaster made regulators tighten the screws, and banks ran scared.

Some even whispered about a secret “Operation Chokepoint 2.0”, a shady attempt to squeeze crypto out by cutting off banking access.

Sounds like a bad episode from a sitcom, where corporate politics crush a promising project just because the boss doesn’t get it.

But the Fed isn’t the only one flipping the script. The OCC and FDIC have also started tossing reputational risk off their watchlists. The tide’s clearly turning.

Win for the crypto industry

Politicians like Wyoming’s Senator Cynthia Lummis are throwing high-fives, calling this a win for crypto.

She’s been fighting the good fight, exposing how these aggressive policies have been strangling American digital asset businesses.

Still, she warns, this isn’t the finish line. More work’s needed to build a fair, stable banking world for crypto.

And don’t forget, Senator Tim Scott’s got a bill brewing to make this change stick in stone.

If that passes, it could finally open the floodgates for crypto firms to get real banking services without the fear of being tossed aside.