The US Federal Reserve officially removed both supervisory guidelines yesterday (Thursday), which had discouraged American banks from engaging in activities involving cryptocurrencies and stablecoins. Specifically, the regulator rescinded two supervisory letters—one from 2022 and another from 2023.
“These actions ensure the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system,” the Fed stated in its latest announcement.
No Advance Notification Is Needed
State member banks are no longer required to notify the regulator in advance of planned or current crypto-asset activities. Instead, the Fed will monitor such activities through the normal supervisory process.
Jerome Powell, Chair of the Fed (Getty Images)
“A supervised banking organisation should notify its lead supervisory point of contact at the Federal Reserve prior to engaging in any crypto-asset-related activity,” the Fed had written in its now-withdrawn 2022 supervisory letter.
These earlier measures were implemented due to concerns that crypto-asset-related activities posed risks to safety and soundness, consumer protection, and financial stability.
The second letter, issued in 2023, instructed banks to obtain a no-objection from the Fed before engaging in stablecoin-related activities, referred to as “dollar tokens.”
“A state member bank seeking to engage in such dollar token activities, including for the purpose of testing, must notify its lead supervisory point of contact at the Federal Reserve of the bank’s intention to engage in the proposed activity and should include a description of the proposed activity,” the letter stated. That requirement has now been rescinded.
A Crypto-Friendly Regime
The withdrawal of these guidelines comes as the current Donald Trump administration positions itself as supportive of crypto. During his presidential campaign, Trump even described himself as the first Bitcoin President.
With the backing of several crypto industry figures, Trump pledged to simplify crypto regulations—and has largely followed through. He established a working group to examine crypto regulation in the US and ordered the creation of a national Bitcoin reserve.
Moreover, the Securities and Exchange Commission (SEC), following the departure of Gary Gensler as Chair, dropped several high-profile lawsuits against crypto companies and reduced the scope of its crypto enforcement efforts.
The newly appointed SEC Chair, Paul Atkins, is also seen as supportive of crypto, with a reported $6 million investment exposure to digital assets.
The US Federal Reserve officially removed both supervisory guidelines yesterday (Thursday), which had discouraged American banks from engaging in activities involving cryptocurrencies and stablecoins. Specifically, the regulator rescinded two supervisory letters—one from 2022 and another from 2023.
“These actions ensure the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system,” the Fed stated in its latest announcement.
No Advance Notification Is Needed
State member banks are no longer required to notify the regulator in advance of planned or current crypto-asset activities. Instead, the Fed will monitor such activities through the normal supervisory process.
Jerome Powell, Chair of the Fed (Getty Images)
“A supervised banking organisation should notify its lead supervisory point of contact at the Federal Reserve prior to engaging in any crypto-asset-related activity,” the Fed had written in its now-withdrawn 2022 supervisory letter.
These earlier measures were implemented due to concerns that crypto-asset-related activities posed risks to safety and soundness, consumer protection, and financial stability.
The second letter, issued in 2023, instructed banks to obtain a no-objection from the Fed before engaging in stablecoin-related activities, referred to as “dollar tokens.”
“A state member bank seeking to engage in such dollar token activities, including for the purpose of testing, must notify its lead supervisory point of contact at the Federal Reserve of the bank’s intention to engage in the proposed activity and should include a description of the proposed activity,” the letter stated. That requirement has now been rescinded.
A Crypto-Friendly Regime
The withdrawal of these guidelines comes as the current Donald Trump administration positions itself as supportive of crypto. During his presidential campaign, Trump even described himself as the first Bitcoin President.
With the backing of several crypto industry figures, Trump pledged to simplify crypto regulations—and has largely followed through. He established a working group to examine crypto regulation in the US and ordered the creation of a national Bitcoin reserve.
Moreover, the Securities and Exchange Commission (SEC), following the departure of Gary Gensler as Chair, dropped several high-profile lawsuits against crypto companies and reduced the scope of its crypto enforcement efforts.
The newly appointed SEC Chair, Paul Atkins, is also seen as supportive of crypto, with a reported $6 million investment exposure to digital assets.
