The Federal Reserve has rescinded its previous guidance on cryptocurrencies, affecting how banks handle cryptocurrency activities. This change comes after a joint action with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).
Previously, banks were required to notify regulators of cryptocurrency activities. This requirement has been eliminated, providing comfort and clarity for financial institutions involved with digital assets.
Institutional participation in cryptocurrencies is expected to increase.
Banks can now engage in cryptocurrency activities without prior restrictions, representing a positive shift in institutional participation in this field. The cryptocurrency community sees this as a historic transition.
This step may lead to a significant increase in investments within the cryptocurrency market, which has substantial financial implications for major tokens like Bitcoin and Ethereum.
A historic shift in U.S. banks' participation in cryptocurrencies
Previous regulations restricted banks' participation in cryptocurrencies after severe failures. Now, these regulatory barriers have been lifted, potentially sparking new interest.
Experts expect an increase in the adoption of cryptocurrencies across the banking sector, anticipating that integration will enhance the inclusive financial ecosystem based on analyses and market trends.
As Jerome Powell, the chairman of the Federal Reserve, stated:
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