$ETH Banks now have a free pass to back bitcoin in the U.S.

The FED relaxes its guidelines and paves the way for financial innovation with crypto assets. Source: Grok.

They indicate that, from now on, activities will be supervised with regular processes.

The FED will assess with other agencies whether new guidance is needed to foster banking innovation.

Recently, the Federal Reserve of the U.S. (FED) announced the removal of several guidelines regulating banks' activities related to crypto assets. According to the agency, the goal is to update regulations in light of new risks and promote innovation within the financial system.

In particular, two supervisory letters imposing prior requirements were eliminated. The first, from 2022, required state banks to notify in advance their plans to operate with cryptocurrencies. From now on, this notification will no longer be necessary, and the FED will supervise these activities as part of the usual oversight process.

The second letter, from 2023, established a special procedure that banks had to follow to engage with dollar-backed tokens. It is noteworthy that the FED, along with the Federal Deposit Insurance Corporation (FDIC), withdrew from two statements issued that same year by federal banking regulators concerning banking activities related to crypto assets.

In a post on its official portal, the agency indicated that it will work with other agencies to evaluate whether it is necessary to establish new guidelines that support innovation, including the use of digital currencies.