New Trends in U.S. Financial Regulation: The Encryption Industry Welcomes Development Opportunities

Recently, there has been a notable change in the field of financial regulation in the United States. The Federal Deposit Insurance Corporation (FDIC) may follow the lead of the Office of the Comptroller of the Currency (OCC) and no longer consider "reputational risk" as a factor in bank regulation. This news has garnered widespread attention in the encryption currency industry and is seen as a significant opportunity for the industry's development.

Reputation Risk: The Intangible Barriers to the Development of the Encryption Industry

For a long time, "reputational risk" has been a major concern for American banks when collaborating with encryption companies. This concept refers to the potential reputational damage that banks may face due to certain business activities or behaviors. In practice, this standard is often vague and subjective, leading many banks to decline business relationships with encryption companies out of caution.

This situation has caused encryption companies to face significant difficulties in financial services. Even industry giants like Coinbase have publicly stated the challenges of finding partner banks in the United States. This phenomenon is jokingly referred to in the industry as "Operation Chokepoint 2.0", suggesting that regulatory agencies indirectly restrict the development of the encryption industry through financial means.

Policy Shift: New Opportunities for the Development of the Encryption Industry

The Federal Deposit Insurance Corporation (FDIC) may eliminate the practice of considering "reputational risk" as a banking regulatory factor, a change that could significantly reduce the resistance banks face when collaborating with encryption companies. This is not just a policy adjustment for a single institution, but rather represents a shift in the overall direction of financial regulation in the United States.

The Financial Institutions Risk Management Act (FIRM Act) proposed by U.S. Senator Tim Scott further exemplifies this trend, as the bill aims to limit regulators from pressuring banks through reputational risks. These initiatives collectively indicate that the U.S. government is gradually recognizing encryption as a legitimate economic sector.

Industry Response: Mixed Expectations

The encryption industry generally holds a positive attitude towards this change. The CEO of Bitwise stated in an interview that this is good news for the industry, making collaboration with banks easier and helping to reduce operational costs. Many practitioners believe that this policy adjustment will create a better development environment for encryption companies, allowing them to focus more on innovation and market expansion.

However, there are also views that the cooperation between banks and encryption companies depends not only on regulatory policies but also on factors such as compliance and anti-money laundering risk control capabilities. Most encryption enterprises still have shortcomings in these areas, which may still be one of the reasons why banks hesitate.

Outlook: An Important Step Towards the Maturity of the Encryption Industry

The FDIC's removal of "reputational risk" as a regulatory factor is undoubtedly an important milestone in the development of the encryption industry. It not only removes a major barrier to collaboration between banks and encryption companies but also reflects a positive shift in the United States' attitude towards cryptocurrencies.

However, for the encryption industry to truly establish itself, it needs to continue to make efforts in various aspects such as technological innovation, compliance management, and public trust. Although the road ahead is still long, this policy adjustment has injected new vitality into the industry's development.

In the coming years, we may look back at this moment and regard it as the starting point for cryptocurrency's official entry into the mainstream financial sector. This is not just a policy change, but could also be an important step towards the maturity of the encryption industry.