Federal Reserve Withdraws Crypto Guidance Impacting U.S. Banks
- Fed retracts crypto guidance; aligns with White House crypto policies.
- Bank crypto activities face standard oversight now.
- Banks can freely engage in crypto assets like BTC and ETH.
On April 24, 2025, the Federal Reserve rescinded its prior crypto guidance, permitting U.S. banks to engage with cryptocurrencies.
The new policy broadens financial institutions’ crypto engagements, potentially boosting market adoption and enhancing institutional participation.
Federal Reserve Allows Banks Crypto Activities Without Pre-approval
The Federal Reserve Board announced the withdrawal of its previous restrictions on crypto activities for banks. The move is aimed at incorporating crypto activities into normal supervisory processes rather than requiring pre-approval. The Federal Reserve Press Release states: “The Board is rescinding its 2022 supervisory letter establishing an expectation that state member banks provide advance notification of planned or current crypto-asset activities.”
Coupled with the FDIC and OCC, regulators rescinded joint directives that discouraged bank crypto-asset involvement. This policy change aligns with the current administration’s vision for fostering crypto innovation.
Banks Cleared to Support Bitcoin and Ethereum
The updated framework impacts major cryptocurrencies like Bitcoin and Ethereum, authorizing banks to support them. Institutional investors welcome this, anticipating more accessible crypto asset services.
The financial landscape is poised for transformation as banks can now hold and transfer digital assets. This move removes longstanding barriers and hints at increased crypto adoption across financial sectors.
Experts Predict Rise in Bank-provided Crypto Services
Historically, similar actions like the OCC’s 2020 guidance temporarily increased crypto-banking engagements. The current withdrawal continues this trend, enhancing transparency and regulatory consistency.
Experts predict a potential rise in bank-provided crypto services, drawing parallels with past regulatory changes. Long-term outcomes could signal wider crypto integration within U.S. banking operations.
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