Federal Reserve Chairman Jerome Powell recently affirmed in congressional testimony that U.S. banks are free to provide services to crypto firms and engage in crypto activities, provided they maintain proper risk management and consumer-protection measures.
This marks a major policy shift:
The Fed has removed “reputational risk” from its bank examination criteria — a subjective barrier that's long discouraged banks from crypto relationships.
Powell emphasized that banks get to decide who their customers are, underscoring that providing crypto services is a banking decision, not a regulatory prohibition.
What this means for the market:
~ Greater institutional support for crypto services like custody, trading, and payments.
~ A smoother pathway for traditional banks to integrate digital asset offerings — boosting crypto’s mainstream adoption.