Financial institution regulator, the Federal Reserve, aligns with the FDIC and OCC in abandoning their previously critical stance towards cryptocurrency.
Federal Reserve, FDIC, and OCC Ease Cryptocurrency Regulations for Banks
In a significant move, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) have collectively shifted their approach to regulating cryptocurrency activities for banks. This change signals a more permissive stance focused on risk management rather than pre-approval.
The Federal Reserve has ended its “Novel Activities Supervision Program” and withdrawn supervisory letters (SR Letters 22-6 and 23-8) that previously required banks to notify or obtain Fed approval before engaging in digital asset or stablecoin activities.
Similarly, the FDIC has rescinded its prior Financial Institutions Letter 16-2022 and replaced it with FIL 7-2025. This new guidance clarifies that state nonmember banks may engage in certain crypto activities without prior FDIC approval or notification. The FDIC also announced it no longer requires banks to notify it before offering crypto services.
The OCC, too, has issued Interpretive Letter No. 1183, reaffirming that national banks may engage in digital asset custody and certain blockchain-related activities without a supervisory non-objection process. This effectively removes the previous barriers imposed by a similar rescinded letter (IL 1179).
A joint statement by the Federal Reserve, FDIC, and OCC in July 2025 provided non-binding guidance emphasizing a principles-based risk management approach for crypto-asset safekeeping. This guidance does not impose new regulatory requirements but expects banks to independently assess risks and maintain compliance.
This coordinated regulatory pivot reflects a more open regulatory environment where banks have greater operational flexibility to engage in cryptocurrency and stablecoin activities while being held accountable for managing associated risks internally rather than obtaining prior regulator approval.
However, the overall U.S. regulatory framework for digital assets remains in development, with further clarifications and potentially new rules expected as digital asset markets evolve. The changes aim to ensure the Federal Reserve's expectations remain aligned with evolving risks and support innovation in the banking system.
This shift in approach comes amidst a perceived unfriendliness towards digital assets by the Biden-era financial regulators. Sen. Cynthia Lummis, R-WY, has been vocal in her criticism, calling the Fed's guidance withdrawals "just noise, not real progress" and accusing the Fed of hurting American interests by stifling innovation and shuttering businesses.
For more detailed insights, readers are encouraged to explore articles such as "OCC shifts gears on crypto" by Rajashree Chakravarty and "FDIC eases crypto rules for banks" by Gabrielle Saulsbery, both categorized under Payments, Regulations & Policy.
- As the Federal Reserve, FDIC, and OCC ease cryptocurrency regulations for banks, financial institutions may now invest more freely in digital assets, such as cryptocurrencies and stablecoins, due to the adoption of a principles-based risk management approach.
- The increasing use of technology, including blockchain, in banking operations could open up new avenues for business growth, as these institutions are granted more freedom to engage in digital asset activities without needing prior regulator approval.
- The rise of social-media platforms and the already burgeoning technology sector might see new collaborations and partnerships with banks, as both industries converge in a new digital asset market landscape shaped by regulatory changes and evolving expectations. Meanwhile, the entertainment industry stands poised to benefit from the increased innovation in financial services facilitated by these regulatory developments.
