The US Federal Reserve has taken a major step towards embracing crypto by scrapping key guidance that restricted banks from engaging in crypto and stablecoin activities.
In a statement on April 24, the Fed announced that it will no longer issue the 2022 and 2023 supervisory letters. These letters earlier compelled state member banks to seek permission from the Fed for engaging in crypto services and capped the operations of stablecoins.
Thus, any crypto activity will be just supervised as a part of the regular supervisory process of the Fed. This is a positive signal of making the country more open and friendly towards cryptocurrencies, which has already been initiated under the Trump administration.
Michael Saylor, co-founder of Strategy and a long-time Bitcoin supporter, reacted on X, saying, “Banks are now free to begin supporting Bitcoin.”
The Fed also withdrew joint statements made with the FDIC and OCC that warned banks about fraud risks linked to crypto firms. These past warnings had raised concerns over consumer protection, financial stability, and crypto’s role in money laundering.
The policy shift comes after the SEC revoked a rule in January that required banks to list crypto holdings as liabilities — a rule many felt slowed crypto adoption in the banking sector.
With these changes, the US banking system may increase its involvement in crypto, particularly in stablecoins and Bitcoin. It can be said that it can spur innovation in the crypto space while allowing users to access cryptocurrencies through traditional financial institutions, which are regulated.
This could be a potential start for the development of crypto banking in the United States.
Also Read: Fed Chair Powell Urges Legal Framework for Stablecoins
