Banks now have a free hand to back bitcoin in the U.S.

The Fed removed rules from 2022 and 2023 that required prior procedures for banks to operate with cryptocurrencies

U.S. banking regulators have taken a significant step by withdrawing several guidelines that urged banks to exercise caution when venturing into the world of cryptocurrencies and related activities.

The Federal Reserve removed two supervisory letters that required banks to obtain prior approval before engaging in activities with crypto assets and stablecoins.

Additionally, the Fed joined the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) to withdraw statements from 2023 that urged banks to remain vigilant regarding risks associated with cryptocurrencies. Under the previous guidance, regulators warned banks about volatility, legal uncertainty, and liquidity risks when considering offering services related to cryptocurrencies or accepting cryptocurrency companies as clients.

The removal of these guidelines marks the latest move by the Trump administration to adopt a more favorable stance towards cryptocurrencies. In its statement announcing the changes, the Fed indicated that regulators will assess whether it is appropriate to issue new guidelines to "support innovation, including activities related to crypto assets."

In March, the OCC was the first U.S. regulator to facilitate banks' participation in cryptocurrency activities, also discarding a previous guideline that urged caution in this space.