The U.S. Federal Reserve has proposed a rule to formally codify the removal of “reputational risk” as a factor in bank supervision, aiming to prevent regulators from pressuring banks to sever ties with lawful customers, including cryptocurrency firms. The proposal, open for a 60-day public comment period from Feb. 23, would prohibit supervisors from encouraging or compelling banks to deny services based on political views, religious beliefs, or involvement in lawful but politically disfavored businesses. Vice Chair for Supervision Michelle W. Bowman stated that discrimination on such bases is unlawful and outside the Fed’s supervisory framework. The move follows prior steps by the Fed and the Office of the Comptroller of the Currency to eliminate reputational risk from examinations. The proposal also indicates that permitted payment stablecoin issuers may be included within the definition of covered banking organizations after separate rulemakings. Recent cases of alleged debanking, including account closures involving President Donald Trump and crypto executives, have intensified scrutiny of supervisory practices. Separately, Crypto.com received conditional approval to establish Foris Dax National Trust Bank, joining other crypto firms that have secured similar national trust bank charters.