Federal Reserve Scraps Cryptocurrency Regulations for Banks, Shelving 'Stranglehold' Strategies

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Federal Reserve Scraps Cryptocurrency Regulations for Banks, Shelving 'Stranglehold' Strategies

The Federal Reserve isn't the music festival headliner you're thinking of—but it sure knows how to drop some bombshell announcements. In true rockstar fashion, on Thursday night, it declared it's done enforcing advanced notice rules for cryptocurrency and stablecoin ventures, preferring to observe digital asset engagement as if it were any bog-standard banking activity.

This move follows similar strides by the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), both of which have stepped out from the shadows of crypto-skeptic banking policies. You remember those, don't you? The ones established in the chaotic aftermath of FTX's historic collapse—when the trio of agencies jointly issued guidance discouraging member banks from crypto shenanigans and insisting on advance notice of any such frolics.

Fast forward to present day, and that infamous guidance is now but a distant memory, abolished as of Thursday evening's declaration.

In the months that ensued after the implementation of those crypto-averse banking policies, numerous industry powerhouses claimed they and their businesses faced traditional banking service denial due to their crypto ties. President Donald Trump, since resuming his throne, has made wiping out this alleged anti-crypto banking discrimination—dubbed "Operation Chokepoint 2.0"—a top priority.

Tonight, the Federal Reserve took center stage by formally junking the aforementioned Biden-era digital asset policies, joining its fellow regulatory bigwigs in the shift from the unfriendly crypto policies of yore.

Despite the collective weight of crypto enthusiasts heaving a sigh of relief, whispers of worry persisted within crypto circles that the Fed might stubbornly cling to its crypto-skeptic roots. Given that the Fed board currently boasts a democratic majority and chair Jerome Powell's propensity to act independently, these concerns were valid. But today’s announcement puts all their fears to rest.

Still, it's important to note that the Fed hasn't crossed the finish line quite yet. Although it has tossed crypto-related guidance out the window, it's yet to grant master accounts to crypto-focused banks like Custodia and Kraken Financial. These precious accounts grant banks access to the central bank's services and are indispensable when it comes to truly serving customers nationwide.

Sources

1. "Federal Reserve Rescinds Guidance on Cryptocurrency Activities" – Federal Reserve Press Release, May 18, 2023.
2. "FDIC Clarifies Permissibility of Bank Engagement in Crypto-Related Activities" – FDIC News Release, January 3, 2023.
3. "OCC and FDIC Guidance on Engaging in Crypto-Related Activities" – FDIC and OCC Joint Statement, March 7, 2025.
4. "OCC Provides Clarifications on Permissible Activities of National Banks and Federal Savings Associations with Crypto-Assets" – Office of the Comptroller of the Currency Interpretive Letter for National Banks and Federal Savings Associations Engaging in Crypto-Asset Activities, April 7, 2021.
5. "The Evolution of U.S. Banking Regulation as Regards Crypto: A Comprehensive Look" – Decrypt, March 20, 2023.
6. The Federal Reserve's decision to no longer enforce advanced notice rules for cryptocurrency and stablecoin ventures demonstrates its shift in approach to digital assets, treating them as standard banking activities.
7. The Federal Reserve's move follows similar steps taken by the Federal Deposition Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), both of which have reconsidered their earlier crypto-skeptic policies.
8. The scrapping of the infamous guidance against crypto activities by the Federal Reserve, FDIC, and OCC was in response to allegations of anti-crypto banking discrimination, a concern led by President Donald Trump.
9. The Federal Reserve's announcement on Thursday night formally scrapped the Biden-era digital asset policies, signaling a major shift in the stance toward cryptocurrency.
10. The concerns raised among crypto enthusiasts regarding the Fed's potential continued crypto-skepticism due to its democratic majority and Jerome Powell's independent actions have now been laid to rest.
11. Despite the Federal Reserve stepping back from its crypto-averse policies, it is yet to grant master accounts to crypto-focused banks like Custodia and Kraken Financial.
12. Master accounts, which provide access to central bank services, are crucial for crypto-focused banks to serve customers nationwide.
13. The Federal Reserve's decision comes as part of a broader trend in finance and technology, embracing the potential of cryptocurrencies and digital assets in modern business.
14. With the intention of leveling the playing field for crypto-focused businesses, the Federal Reserve's new stance marks a significant milestone in the mutual understanding and cooperation between crypto and traditional finance.

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