🇺🇸 Major Shift in U.S. Financial Regulation: End of Reputational Risk and Changes in the Crypto Market
In 2025, the U.S. financial regulatory system has reached a fundamental turning point. As the Federal Reserve officially abolished the "reputational risk" standard, a long-standing regulatory barrier for the crypto industry has collapsed. This change is breaking down the boundary between traditional finance and digital assets, opening a new era for the U.S. financial ecosystem.
🔍 What is Reputational Risk?
"Reputational risk" refers to the informal regulatory standard that led banks to avoid dealing with certain industries due to social image or potential public backlash. Industries like cryptocurrency, firearms, and payday lending were often excluded, even if they were legally recognized.
This standard was embedded in the U.S. financial regulatory manual and often caused banks to deny crypto firms access to essential financial services such as accounts, loans, and settlements.
📉 Background and Key Regulatory Changes
In March 2025, the Office of the Comptroller of the Currency (OCC) announced the removal of supervisory practices related to reputational risk. Soon after, both the FDIC and the Federal Reserve followed suit. The Fed has updated its supervisory handbook, eliminating all references to "reputation" and replacing them with quantifiable financial risk metrics.
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Handbook Update: Removal of “reputational risk” and inclusion of objective risk indicators
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Supervisor Training: Revised programs to reduce subjectivity in assessments
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Regulatory Coordination: Alignment with OCC and FDIC standards
These changes provide clarity for both crypto companies and banks, reducing regulatory uncertainty.
🪙 Impact on the Crypto Market
This regulatory relaxation marks a turning point for the crypto industry. Crypto firms have long faced “debanking” — being denied access to basic banking services. These barriers are now expected to be lifted.
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Shift in Major Bank Attitudes: Institutions like JPMorgan and Bank of America now show openness to crypto-related services
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Broader Investment Access: Expansion of crypto investment channels for individuals and institutions
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Mitigation of AML Concerns: Clearer separation of objective risk from reputation-driven avoidance
📈 Outlook: Institutional Foundation and Market Expansion
The Fed's decision is not just a regulatory update — it sets the tone for further institutionalization. The recent passage of the “Clarity Act” in Congress is helping define digital assets and the responsibilities of financial institutions under the law.
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Faster Integration of Traditional Finance and Crypto
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Increased Legitimacy for Stablecoins and DeFi
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Growth of Fintech and Blockchain Sectors
The U.S. move may influence other jurisdictions like Europe and Asia to re-evaluate their own crypto policies.
✅ Conclusion
The 2025 U.S. regulatory reform is not just an update to a manual — it is a structural transformation of how finance and crypto coexist. The abolition of reputational risk shifts bank evaluation criteria toward objective financial risk, opening up unprecedented opportunities for the crypto industry.
This solidifies the U.S.'s position as a global leader in financial innovation and regulatory foresight.
📚 References
[1] http://www.kiri.or.kr/pdf/%EC%97%B0%EA%B5%AC%EC%9E%90%EB%A3%8C/CEO%EB%A6%AC%ED%8F%AC%ED%8A%B8/cre25-2_2.pdf
[2] https://www.g-enews.com/article/Global-Biz/2025/06/202506222025428276906806b77b_1
[3] https://kr.investing.com/news/stock-market-news/article-93CH-1525301
[4] https://www.kiri.or.kr/community/boardDownloadFile.do?bid=155294&seq=1
[5] https://www.g-enews.com/article/Global-Biz/2025/06/202506242121127414906806b77b_1
[6] https://www.blockmedia.co.kr/archives/729751
[7] https://blog.naver.com/ondal0404/223732561277
[8] https://kr.beincrypto.com/base-news/116511/
[9] https://www.lawtimes.co.kr/LawFirm-NewsLetter/203972
[10] http://www.impacton.net/news/articleView.html?idxno=15438
