US regulators have removed crypto warnings, allowing banks to self-regulate as the Federal Reserve joins forces with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. in reversing previous policies.
The U.S. Federal Reserve has completed the trio of U.S. banking agencies that have now eliminated the previous crypto guidance they issued to bankers. This move, made in part to ‘support innovation,’ reverses four pieces of crypto guidance signed onto by the board in 2022 and 2023.
The U.S. Federal Reserve, also known as the Fed, is the central bank of the United States.
Its primary function is to maintain the stability and growth of the country's economy by regulating monetary policy.
The Fed sets interest rates, buys or sells government securities, and supervises banks to ensure their financial health.
It also serves as a lender of last resort during times of economic crisis.
The Federal Reserve System consists of 12 regional Federal Reserve Banks, each responsible for a specific geographic area.
Key Changes for Banks
By withdrawing these guidelines, all three agencies — including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. — have joined in reversing previous policies, leaving crypto matters at banks in the hands of their managers and compliance executives. In the absence of guidance, the banking industry awaits new laws from Congress to define how the digital assets industry should operate in the U.S.
Rationale Behind the Move
The Fed’s decision was made to ‘align with evolving risks’ and further support innovation in the banking system. Banking supervision of its state member banks is one of the multiple roles performed by the Fed, which is better known for its monetary policy work. The agency will instead monitor banks’ crypto-asset activities through the normal supervisory process.
Industry Response
With this change, the banking industry now relies on new laws from Congress to define how the digital assets industry should operate in the U.S. The absence of clear guidance has left many questions unanswered, and banks are waiting for further clarification on the regulatory environment.
