Fed Proposes Rule to End "Operation Chokepoint 2.0"

The Federal Reserve Board of Governors has proposed a rule to remove "reputation risk" from bank supervision standards, aiming to end the controversial practice of Operation Chokepoint 2.0. The proposal would require examiners to focus on concrete financial risks rather than subjective concerns about a bank's public image, potentially curbing debanking pressures that have affected lawful sectors, particularly cryptocurrency firms. The change has been welcomed by Senator Cynthia Lummis and supporters, who say it could help the US become a global hub for digital assets.