The U.S. Federal Reserve Board has updated its cryptThe U.S. Federal Reserve Board of Governors has revised its bank crypto policy, making it more permissive when dealing with digital currencies.
The Fed said it has withdrawn from its 2022 Supervisory Letter requirements that forced banks to give advance notice anytime they engaged in crypto activities. This adjustment reflects the evolving regulatory environment for cryptocurrencies in the United States.
“These actions ensure the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system,” the Fed said in the Thursday statement announcing the change.
U.S. regulators ease crypto oversight, leaving banks to manage digital asset activities
Now, the Federal Reserve joins its fellow U.S. banking regulators in eliminating its previous crypto guidance, including notices that banks should get pre-approvals before they get involved in crypto activity.
All three agencies, including the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corp., have joined in reversing those previous policies, leaving digital asset matters at banks in the hands of their managers and compliance executives. Without guidance, the banking industry awaits new laws from Congress to define how the digital assets industry should operate in the U.S.
Per the Press Release shared by the Fed, it has now chosen to do things differently instead of this stringent oversight. Moving forward, the banking regulator said it will only resort to regulating banks’ crypto activities usually. The Fed also confirmed it is backtracking on a 2023 guidance designed for stablecoins.
“The Board is also rescinding its 2023 supervisory letter regarding the supervisory nonobjection process for state member bank engagement in dollar token activities,” the press release noted.
The OCC had also revised its position and cleared banks to engage in crypto activities. To complement the current shift, the apex bank also confirmed that it will work with relevant agencies to determine whether more guidance will be forthcoming.
The OCC has also updated its stance, allowing banks to engage in crypto activities. In line with this shift, the apex bank also confirmed that it will work with relevant agencies to determine whether more guidance will be forthcoming.
The ultimate goal is to foster crypto-based innovation to an appropriate level.
U.S. regulators shift toward a more crypto-friendly approach under Trump
Since President Donald Trump’s inauguration, the Federal Reserve, the U.S. Securities and Exchange Commission (SEC), and other key agencies have begun recalibrating their stance on digital assets. There has been a noticeable shift in both approach and focus.
Initially, the Trump administration’s approach to cryptocurrencies appeared somewhat indifferent. However, as the digital asset space gained momentum, agencies began to respond to balance innovation with regulation. The SEC has dropped some crypto lawsuits to fulfill the President’s campaign promises.
One of the high-profile cases the SEC closed is the Ripple lawsuit. After more than four years of legal battle, the regulator rescinded its appeal on the case, a gesture matched by the payments firm.
Other top crypto exchanges, such as Coinbase Global, Uniswap, and Kraken, have also seen their cases closed. With Paul Atkins now sworn in as Chairman of the SEC, he has proclaimed that Bitcoin will be his priority.
He is is widely expected to lead a more crypto-friendly SEC than former chair Gary Gensler under the Biden administration.
His confirmation was reportedly delayed due to several financial disclosures he needed to file due to marrying into a billionaire family.
Some of those financial disclosures reportedly included up to $6 million worth of crypto-related investments, including crypto custody platform Anchorage Digital and blockchain tokenization platform Securitize.
Regulators signal the end of operation Chokepoint 2.0
Conversations around Operation Chokepoint 2.0 have filled the crypto ecosystem Over the past year. Firms operating in the industry have complained of direct efforts to hinder crypto innovation.
Coinbase is filing an active FOIA lawsuit with the FDIC to uncover ways the agency has tried to choke firms. The President and Crypto Czar David Sacks have promised to end the industry chokepoint and chart a new course for the US digital assets ecosystem.
The recent developments by the Federal Reserve, the OCC, the SEC, and the FDIC confirm the end of Operation Chokepoint agenda.
The SEC Chair stated that ambiguous rules hinder growth and promised to focus on investor protection, depoliticizing regulation, and ensuring smart, effective oversight.
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