Crypto industry leaders have long criticized debanking, in which banks sever or deny accounts they deem risky, as a barrier to maintaining banking relationships, and they say the Fed’s removal of reputational risk could help curb this practice

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For years, crypto companies in the United States have faced a frustrating problem. Even when fully legal and compliant, many found themselves locked out of traditional banking. The issue wasn’t fraud or instability. It was image. Banks were worried that working with crypto firms would hurt their reputation. That kind of risk, often vague and hard to define, could trigger extra scrutiny during exams. It discouraged banks from touching anything remotely controversial.

"Debanking" is when a bank terminates accounts deemed risky, such as with extreme political affiliations or high likelihood for fraud. Crypto industry leaders have long complained about the difficulty of forging and maintaining banking relationships.