US banks

For years, the banking system has returned to Bitcoin (BTC) and cryptocurrency companies, but it is now changing. In fact, today the office of the U.S. Secretary of Currency (OCC) has knocked on another wall that prevents digital assets from being associated with banks.

The OCC has decided to eliminate the concept of “reputation risk” in the bank inspection manual. This measure is backed by Donald Trump’s government’s deregulation efforts and its professional Bitcoin policyshowing significant changes in US banks’ oversight, including giants such as JPMorgan Chase, Bank of America and Wells Fargo.

OCC interim director Rodney Hood declared Thursday that examiners will no longer oversee the bank based on reputational risks. This is a broad category that has been used to push financial institutions to stop attendance to customers, according to critics, being deemed “political offensive.” Among these clients are companies in the sector, such as digital assets, firearms, fast loans, oil and gas.

As understood in the banking sector, reputational risk is a potential damage to the image, reliability, or public trust of a financial institution, even if these activities do not represent a direct financial risk of the bank, due to their association with a particular client or industry that is considered controversial, unpopular, or risky.

In other words, the concept refers to If you think people are doing business, the risk of a bank’s reputation suffering With ethical, responsible or the company or individual the company sees, whether these businesses are legally and financially solid. Contrary to what was believed, the West now believes this concept is being used subjectively, leading to discrimination in certain legal industries, such as those that grew around Bitcoin and other digital assets.

Banks and Bitcoin are closer than ever

The change occurs when other bank regulators, such as the Federal Reserve, are also reconsidering their testing policies. This saw Jerome Powell in January, when he pledged to remove references to “controversial comments or activities” by financial institution leaders from the manual.

fight Digital asset companies have won several battles And about this, a few weeks ago, the Senate Banking Committee discussed the law presented by Sen. Tim Scott (R-South Carolina) who attempted to prohibit all bank regulators from using reputational risks in testing.

Scott was accompanied by the bill by a Republican colleague on the Senate Banking Committee, including Sen. Cynthia Ramis.

“Americans deserve a transparent regulatory framework that encourages innovation in digital assets, rather than quelling it with government overreach,” said Ramis, who chairs the Senate Banking Subcommittee on Digital Assets.

It is noteworthy that the Supreme Court allowed the use of reputational risks in May last year. This comes after the incident in which the National Rifle Association (NRA) called for Maria T. Vrulo, former director of the New York Financial Services division. since then, Political pressures lie in a balance towards a more relaxed oversight.

In the midst of the day, the new OCTA position also shows the critical abandonment of what is known as the Chokepoint 2.0 tactic, an informal strategy that limits the relationship between banks and the Bitcoin and cryptocurrency sectors. The change is reported to be a pioneering digital currency in the US shortly after President Donald Trump created a strategic Bitcoin reserve two weeks ago.

For Bitcoin companies, these measures represent a historic victory. For years, they faced bank rejection under the excuse of reputational risk and were compliant with regulations. Currently, the West focuses on specific financial risks and approval activities related to digital assets; Access to traditional banking systems is considered a much broader reality so far.