Federal Reserve Eases Crypto Rules for Banks in Significant Policy Change

The Federal Reserve Board has announced changes to its approach towards banks' crypto asset and stablecoin activities. It has withdrawn guidance requiring banks to provide advance notice of such activities and also revoked the order necessitating prior approval for stablecoin activities.

Regulatory oversight will now fall under standard supervision, eliminating the need for pre-clearance. The move aims to align the Fed's supervisory approach with evolving risks and to foster innovation in the banking system.

The decision aligns with recent developments under the Trump administration, which has seen favourable outcomes for the crypto industry, including the DOJ ceasing to pursue criminal charges against regulatory violators in the crypto industry, and the SEC and CFTC downsizing their crypto prosecution departments.