The U.S. Federal Reserve has reversed its earlier cautious stance toward digital assets, removing key regulatory hurdles that previously restricted banks from engaging in cryptocurrency and stablecoin-related activities.
In a press release on April 24, the central bank announced that state-chartered member banks are no longer required to provide advance notice before launching or participating in crypto-related ventures. Instead, these activities will now be subject to the standard supervisory process applied to other banking operations.
This marks a significant departure from the Fed’s 2023 approach, which emphasized heightened scrutiny and risk mitigation due to concerns over volatility, fraud, and lack of consumer protections in the crypto industry. Alongside the rule change, the Fed formally rescinded its previous guidance that limited bank dealings with stablecoins — commonly called “dollar tokens.”
Further distancing itself from its prior warnings, the Fed joined Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) in withdrawing two joint statements issued last year. These statements raised alarms about the unpredictability of crypto-related deposits and flagged issues around transparency and legal safeguards in the digital asset space.
While the Fed emphasized that oversight will continue through routine supervision, the move is widely seen as a green light for increased bank participation in crypto markets. Analysts suggest the change will ease compliance pressures and accelerate institutional adoption of digital assets.
The policy shift aligns with broader regulatory developments in Washington. Earlier this year, the Securities and Exchange Commission (SEC) rolled back a rule requiring banks holding cryptocurrencies to report them as liabilities. This change had drawn criticism from the banking sector.
Federal Reserve Governor Christopher Waller also advocates for a regulatory framework that permits banks and non-banks to issue stablecoins. He believes stablecoins could enhance the U.S. dollar’s global influence, but their effective adoption requires clear regulations.
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