Federal Reserve reduces reputation risk categories in Crypto’s Win.
The US Federal Reserve Bank said that the bank’s supervision, which claimed that the Crypto industry was used to use a rimical encryption company for a long time, ordered not to consider “reputation risk” anymore.
The industry was considered to have faced an important issue in establishing or maintaining dangerous banking relationships, which led the so -called operation Chokepoint 2.0 when more than 30 technologies and cryptocurrencies rejected banking in the United States.
In a Monday statement, the Federal Reserve Board said in the supervision data that it began to review and remove reference and reputation of reputation and reputation risks and replaced it with more “concrete discussions.”
At the same time, the board of directors will train the prosecutor and consistently implement changes across the bank under the supervision, and cooperate with other federal bank regulators to encourage consistent practices.
Banks still need risk management practices.
Despite this change, the Federal Reserve said it still expects that banks will maintain strong risk management that comply with all laws and regulations.
This change is also “It is not intended to affect whether the Board of Directors use the concept of reputation in their risk management practices.”
The Federal Reserve Defense Bank defines the true risk of reputation, regardless of whether it is truly a negative promotion of business practices of the institution, as the possibility of a decrease in customer base, costly lawsuit, or a reduction in profits.
Benefits for encryption and banks
Senator Cynthia added that the aggressive reputation risk policy was “assassinated the US Bitcoin and Digital Asset Business.”
Rob Nichols, the president and CEO of the American Bankers Association, said in a statement that “this change will make the supervisory process more transparent and consistent.”
“We believed that banks should be able to make business decisions based on careful risk management and free markets, not individual perspectives of regulators.”
But critics say that eliminating the risk of reputation can ambigue non -financial issues, bank stability, weakness and potentially dangerous bank practices.
Regulatory agencies that withdraw the encryption are frozen.
Other regulators and supervisors in the United States began to withdraw restrictions on encryption this year.
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The US Monetary Manager Office confirmed that in May, the bank in charge of jurisdiction could trade with customers on behalf of customers and outsourcing some encryption activities to third parties.
The US Federal Deposit Insurance Company, an independent federal government agency, also said in March that the agency could participate in an activity related to passwords without prior approval under the supervision of banks, including banks.
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