Key Takeaways
The US Blockchain Association is backing a Federal Reserve proposal to formally eliminate "reputation risk" from bank examinations, a move the group argues is essential to prevent the politically motivated debanking of crypto firms.
"The Blockchain Association strongly encourages the Board to move expeditiously to finalize and codify the removal of reputation risk from its supervisory framework," Ashok Pinto, the group's executive vice president of legal and government relations, said in a letter sent Monday. "Regulation is meant to uphold the integrity of our financial system, not to pick winners and losers based on the political winds of the day."
The Fed's proposal, which follows its removal of reputation risk from examination manuals in June 2025, would align its policy with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). Those two regulators issued a final rule to codify the removal of reputation risk on April 7. The Blockchain Association argues the subjective nature of reputation risk was used to unofficially de-bank legitimate crypto businesses in a campaign known as "Operation Chokepoint 2.0."
Codifying the rule would provide a more durable, administration-neutral banking framework for the digital asset industry, potentially stabilizing access to crucial financial services. The change comes as a record number of 18 crypto and fintech firms, including Coinbase and the Trump-co-founded World Liberty Trust, have applied for or received national bank charters in 2026, showing a clear trend toward deeper integration with the traditional finance system.
The push for regulatory clarity is happening as the digital asset industry increasingly seeks to legitimize its operations within the traditional banking system. The removal of subjective supervisory measures like reputation risk is seen as a critical step in reducing uncertainty for banks that wish to service crypto-related companies.
This regulatory relief appears to be encouraging firms to come into the fold. According to a tracker from American Banker, 2026 has seen an unprecedented wave of fintechs and crypto companies applying for bank charters. In the first quarter alone, nearly 20 firms have sought charters from the OCC. This includes major crypto players like the exchange Coinbase, which received conditional approval for a national trust charter in April, and stablecoin fintech Agora Finance, which applied for a trust bank charter the same month.
The trend is not limited to crypto-native firms. U.K.-based challenger bank Revolut and the Brazilian neobank Nubank are also seeking U.S. charters to expand their services, which include digital asset custody. This convergence of crypto and traditional finance suggests that as regulatory hurdles are lowered, the incentive for firms to seek formal banking status grows, potentially leading to a more robust and competitive financial landscape.
"A standard harmonized across federal departments and agencies would provide regulated entities with the clarity and predictability they are owed," Pinto wrote in his letter, emphasizing the need for consistent rules to maintain confidence in the regulatory process.
This article is for informational purposes only and does not constitute investment advice.
