Federal Reserve Moves to Curb ‘Debanking’ of Crypto Firms and Lawful Businesses

The Federal Reserve is seeking public comment on a new proposal aimed at preventing bank supervisors from pressuring financial institutions to cut off lawful customers, including cryptocurrency companies, over so-called “reputation risk.” The move follows renewed scrutiny of debanking practices after JPMorgan Chase acknowledged it closed more than 50 accounts linked to President Donald Trump shortly after the Jan. 6, 2021 Capitol attack.

Fed Vice Chair for Supervision Michelle W. Bowman said regulators have received reports of supervisors urging banks to sever ties with customers based on political views, religious beliefs, or involvement in legally operating but controversial industries such as crypto. Bowman emphasized that discrimination on these grounds is unlawful and should not be part of the Federal Reserve’s supervisory framework.

The proposal would formally remove “reputation risk” from the Fed’s bank examination programs. According to a Jan. 26 memo to the Board of Governors, the rule would prohibit the central bank from encouraging or compelling financial institutions to deny services to customers engaged in politically disfavored but lawful activities. Public comments on the proposal are due within 60 days of Feb. 23.

The Office of the Comptroller of the Currency previously eliminated reputational risk from its supervisory criteria, and the Fed announced a similar shift last July. This rulemaking would codify that policy change.

Debanking in the crypto industry has been widely reported. In November 2025, Strike CEO Jack Mallers said JPMorgan abruptly closed his accounts without explanation. Meanwhile, JPMorgan disclosed in a recent legal response that it shut down Trump-related accounts in February 2021, though it did not specify why.

The Fed also signaled it plans to include permitted payment stablecoin issuers under its definition of covered banking organizations after completing separate rulemakings, a step that could significantly impact crypto firms seeking reliable access to the U.S. banking system.