The Crypto Industry Welcomes The Historic Decision Of The FDIC In The USA

The decision of American regulators to abandon “de-banking” practices marks a decisive turning point for the cryptocurrency industry. David Sacks, crypto lead at the White House, calls this change a “great victory” for the digital asset sector.

The FDIC Eliminates the “Reputational Risk” from its Regulatory Arsenal

On March 25, David Sacks announced a decisive regulatory advancement on his X account (formerly Twitter).

The Federal Deposit Insurance Corporation (FDIC) has officially decided to abandon the use of the “reputational risk” criterion in its banking supervision, thus following the lead of the Office of the Comptroller of the Currency (OCC).

This controversial criterion defined risk as “the possibility that negative publicity regarding an institution’s practices, whether founded or not, leads to a loss of clientele, litigation, or revenue declines.”

According to Sacks, this overly vague definition served as a pretext to cut off access to banking services for many legitimate crypto businesses.

Sector advocates have long denounced this practice, referring to it as “Operation Chokepoint 2.0”, referencing a controversial program that limited banking access for certain industries deemed sensitive.

A New Start for Relationships Between Banks and Crypto Businesses

This major evolution fits into a broader political dynamic aimed at normalizing relations between banks and crypto businesses.

In early March, Republican Senator Tim Scott introduced the FIRM (Financial Integrity and Regulatory Management Act), which specifically aims to ban the use of “reputational risk” as a criterion for federal banking oversight.

On March 24, Republican members of the Senate Banking Committee confirmed that the FDIC would remove this criterion from its oversight methodology.

In a press release on March 28, the agency announced an even more concrete measure: banks can now engage in cryptocurrency-related activities without prior authorization, as long as these activities are legal and risks are properly managed.

David Sacks particularly emphasized the importance of establishing “objective and measurable” banking criteria, rather than those based on subjective perceptions. According to him, “banking criteria must be objective and measurable, not based on the possibility of misinformation.“

This regulatory reform opens a new era for the American crypto industry. The FDIC, once viewed as hostile to the sector, now seems ready to develop a framework allowing financial institutions to engage more easily with digital assets while maintaining appropriate risk management.