The Federal Reserve has joined the OCC and FDIC in revoking previous crypto guidance that mandated U.S. banks obtain approvals for cryptocurrency activities. This decision is made to support innovation and forward movement within the banking industry. The Fed aims to monitor these activities through regular supervisory processes, while awaiting new Congressional regulations on the digital asset sector.
In a significant move, the Federal Reserve has followed suit with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) by withdrawing prior warnings regarding cryptocurrency activities for U.S. banks. This action signifies a major shift in the regulatory landscape, allowing banks to manage crypto engagements without needing pre-approval from regulators.
The Fed’s decision, announced on Thursday, aims to foster innovation in the banking sector, reflecting an evolving approach to financial technology and its risks. By rescinding earlier guidance that had stressed the need for regulatory sign-offs, the Fed, like its counterparts, is now leaving the responsibility of crypto oversight in the hands of individual bank management and compliance teams.
Specifically, the Fed has removed four pieces of crypto-related guidance that were introduced between 2022 and 2023. These earlier directives highlighted various risks associated with cryptocurrencies for banks within the system. Instead of prior approvals, the Fed stated it will continue to oversee banks’ crypto activities through standard supervisory channels.
This development arises amid an environment where the banking industry is anticipating new regulations from Congress to clarify operational rules for digital assets in the U.S. Without federal guidelines, the banking sector is left to navigate these waters largely independently. The Fed’s move opens the door for banks to innovate and explore opportunities in digital currencies and blockchain technologies without being hindered by restrictive pre-approval processes.
