Fed Drops Crypto Restrictions for Banks, Opening Doors to Digital Assets

In a surprise twist that’s got crypto watchers buzzing, the U.S. Federal Reserve just scrapped its prior rules that forced banks to jump through extra hoops before touching anything crypto-related. Up until now, banks had to get special permission from the Fed before engaging in any digital asset or stablecoin activity. That’s no longer the case.

This shift brings the Fed in line with the FDIC and the OCC, both of which already dropped similar rules earlier this year. In short, the three top banking regulators in the country are now moving toward a more unified, less hand-holding approach when it comes to how banks handle crypto.

Back in 2022 and 2023, the Fed had rolled out strict supervisory letters, largely as a reaction to the chaos unfolding across the crypto world. Big firms were collapsing, liquidity was drying up, and regulators were trying to plug holes in real time. Those letters required banks to get what’s called a “supervisory non-objection.” Basically, a thumbs-up from the Fed, before getting involved with digital assets.

Now those letters are in the shredder.

What This Means for Banks

So what changes for banks? Quite a bit, actually.

Banks supervised by the Fed can now move into crypto or stablecoin services without asking for pre-approval. That doesn’t mean they can act recklessly; they’re still expected to operate within the Fed’s broader oversight system, but the red tape is thinner now.

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