The Federal Reserve announced this week that it is lifting restrictions on banks' cryptocurrency activities, marking a significant victory for the cryptocurrency industry. With regulators moving towards standardized oversight, banks no longer need Federal Reserve approval to operate stablecoins, representing an important milestone for innovation in cryptocurrency.
The Federal Reserve Committee stated on Thursday that it has withdrawn guidance related to banks' crypto asset and stablecoin activities, and updated expectations for these activities. Part of this policy change involves rescinding a regulatory letter issued in 2022 that required member banks to provide advance notice of any planned crypto asset activities.
New policy regulations bring changes.
The new regulations mean that banks no longer need to report such activities in advance, simplifying operational processes. At the same time, the Federal Reserve has also revoked similar orders effective from 2023, allowing state member banks to participate in stablecoin activities without prior approval. This marks a more flexible regulatory environment for crypto assets, further promoting innovation within the banking system.
Additionally, the Federal Reserve will jointly withdraw from two joint statements issued in 2023 with the Federal Deposit Insurance Corporation (FDIC), which detailed regulators' views on risks associated with crypto assets and provided preliminary guidance for financial institutions operating in this area.
After adjustments, the Federal Reserve will collaborate with other relevant agencies to assess whether updated guidance is needed to support innovation in crypto-related activities.
It is noteworthy that just a few weeks ago, the Office of the Comptroller of the Currency (OCC) also took similar actions. This federal banking regulator also lifted restrictions on financial institutions' participation in crypto assets.
However, prior to these policies being implemented, some industry insiders claimed that they and their businesses were denied traditional banking services solely due to their association with the digital asset industry. This situation is viewed by some as a targeted 'Operation Chokepoint 2.0' suppression.
The industry is actively embracing change.
It is worth noting that this ruling is one of a series of measures supporting the cryptocurrency industry by the Trump administration. Prior to this, the U.S. Department of Justice (DOJ) announced it would no longer pursue criminal charges against cryptocurrency exchanges, developers, or users involved in regulatory violations, and this change occurred after the dissolution of the National Cryptocurrency Enforcement Team (NCET).
Additionally, both the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) have similarly reduced the size of departments responsible for cryptocurrency enforcement this year. All these factors have collectively driven positive developments in the cryptocurrency industry, creating anticipation for the future.
In summary, the consistent shift in these policies provides a new ray of hope for the cryptocurrency industry, and how to safely and efficiently promote the development of this innovative field in the future remains to be seen!
What do you think about the Federal Reserve's policy shift? What do you think this means for the future of cryptocurrency? Leave a comment in the discussion section!