#BitcoinTreasuryWatch

Powell’s Crypto Olive Branch: Has the Fed Finally Let Banks In?

In a landmark shift, Federal Reserve Chair Jerome Powell has made it clear that U.S. banks are now permitted to offer crypto-related services—ranging from custody to transactions for cryptocurrency firms—so long as they manage the risks responsibly and maintain consumer protections. This marks a significant reversal of prior Fed guidance that had raised barriers and encouraged excessive caution toward crypto participants.

Beyond verbal assurances, the Fed took formal action on April 24, 2025, rescinding its 2022 letter requiring banks to notify the Fed before engaging in crypto-asset activities and withdrawing subsequent supervisory guidance tied to stablecoins and related services. This completes a broader deregulatory wave alongside the FDIC and OCC—and signals a new era of crypto innovation through traditional banking rails.