Crypto Lobby Backs Federal Reserve Plan to Remove Reputation Risk

The Federal Reserve's plan to codify the removal of 'reputation risk' from its supervision of banks has gained support from the US crypto lobby group Blockchain Association.

In a recent letter, the association's executive vice president of legal and government relations, Ashok Pinto, urged the Fed to finalize the rule, arguing that it would provide 'administration-neutral protection' for American businesses operating within the financial system.

The move aims to prevent banks from debanking crypto companies based on their reputation, a practice that has been criticized as arbitrary and unpredictable. By removing reputation risk from supervisory programs, the Fed can ensure that regulatory decisions are grounded in objective, consistent, and measurable standards.