Core Viewpoint - The Federal Reserve has initiated a 60-day public comment period on a proposal to permanently remove "reputational risk" from bank regulatory rules, marking a significant shift towards loosening bank regulations and focusing on substantive risks to bank safety and soundness [1][2]. Group 1: Proposal Details - The proposal mandates examiners to prioritize substantial risks threatening the safety and soundness of banks, explicitly prohibiting penalties or restrictions on clients engaged in lawful activities due to "reputational risk," including cryptocurrency businesses [1]. - This move aims to legally prevent the use of "reputational risk" as a regulatory tool, which is seen as a response to the ongoing trend of de-banking in the cryptocurrency sector [1]. Group 2: Industry Reactions - Senator Cynthia Lummis expressed that this proposal should have been implemented earlier, highlighting its importance in ending the "Operation Choke Point 2.0" and positioning the U.S. as a global center for digital assets [2]. - Sudhakar Lakshmanaraja, founder of Digital South Trust, emphasized the necessity of this corrective measure while urging Congress to establish clear legislative frameworks for the cryptocurrency market and stablecoins to ensure predictable banking access for legitimate businesses [2].