Fed’s Banking Rule Change Unleashes a Crypto Gold Rush for US Businesses

The Federal Reserve just handed crypto firms the keys to the kingdom—and Wall Street isn’t thrilled.

Breaking the Chains

New Fed rules slash capital requirements for banks holding crypto assets, effectively greasing the rails for institutional adoption. No more punitive treatment for Bitcoin reserves or stablecoin collateral. Suddenly, the 'wild west' of finance looks a lot more like Main Street.

The Compliance Loophole

By reclassifying crypto custody as a 'low-risk' activity, the Fed accidentally validated what Coinbase’s legal team has argued for years. Now watch every regional bank scramble to offer digital asset services—while Jamie Dimon quietly updates his anti-crypto PowerPoint deck.

The Bottom Line

This isn’t just about regulatory clarity—it’s a $50B liquidity injection disguised as bureaucracy. Crypto startups can finally stop pretending to be 'tech companies' and embrace their true calling: disrupting finance with fewer roadblocks. The irony? The same regulators who once feared crypto are now its unlikely accelerant. Just don’t expect them to admit it over martinis at the next G7 summit.

The Era of Crypto Debanking Ends

The banking sector and crypto industry have had a troubled history over the past few years, but it’s not necessarily the banks’ fault.

Federal regulators waged a campaign of debanking against the crypto industry, greatly discouraging cooperation between these sectors. However, this damage is being reversed, and the industry won an important win today:

NEW: The Fed says it’s scrapping “reputational risk” as a factor in how it supervises banks.

In a memo released today, the central bank says it will remove the term (which lawmakers credit with playing a major role in the debanking of crypto firms and other businesses) from… https://t.co/V5c43NxruS

According to the Fed’s newest press release, reputational risk will “no longer be a component” of its supervision of banks. To be clear, the document doesn’t directly refer to crypto or debanking in any capacity.

Nonetheless, it’s easy to read between the lines to call this an important regulatory success for crypto for a few reasons.

First of all, the Federal Reserve was the last major institution to keep this tool open. The FDIC scrapped a similar rule in March, which David Sacks called a “big win” against crypto debanking.

Indeed, several regulators formerly had reputational risk rules in force, enabling massive harassment campaigns against crypto leaders. That period is officially over.

Also, this MOVE shifts banking regulations away from discretionary, values-driven enforcement and toward transparent, evidence-based supervision.

This could help institutional crypto adoption, as banks might feel more confident engaging with digital asset clients under clearer supervisory expectations.

Supervision news: The Federal Reserve is falling in line with other bank regulators and dispensing with "reputational risk," a FORM of supervision that asses whether non-financial policies can impact a bank's safety and soundness. This has been a big GOP priority. pic.twitter.com/ic2JQ3Y2qK

In other words, this rule change will encourage crypto and TradFi to move on from the legacy of debanking. This won’t guarantee new cooperation, but it’ll allow banks to assess potential crypto clients more objectively.

By removing a legal barrier, the Fed is enabling banks to confidently engage with Web3.

Several major investment banks are already interested in the sector, so this incentive could accelerate existing trends.

Operation Choke Point 2.0 and the debanking era were a traumatizing time for crypto, but a new day is already here. There are plentiful opportunities to create a new ecosystem with friendlier regulations.