Federal Reserve Rolls Back Crypto Restrictions for Banks

The U.S. Federal Reserve has rescinded prior guidance that discouraged banks from engaging with cryptocurrencies and stablecoins, the central bank announced today.

The Fed said it is withdrawing its 2022 supervisory letter that required banks to pre-notify regulators about crypto-related activities, along with separate 2023 guidance on stablecoin services. Going forward, banks’ crypto activities will be monitored through the standard supervisory process rather than through additional reporting.

The Fed, along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), also rolled back earlier statements warning of the risks associated with crypto asset exposures, particularly fraud and scams.

“The Board will work with the agencies to consider whether additional guidance to support innovation, including crypto-asset activities, is appropriate,” the Fed said.

The crypto industry welcomed the move. Michael Saylor, co-founder of Strategy, the largest public Bitcoin-holding firm, posted on X that “banks are now free to begin supporting Bitcoin.”

For its part, the FDIC also said banks under its supervision can now pursue crypto-related business without waiting for a green light from the agency. The decision effectively ends a key pillar of the prior administration’s restrictive approach, which left banks stalled in limbo and sidelined from crypto markets for years.

The original 2022 guidance — issued during the Biden administration — warned banks against entering the crypto space without notifying regulators. But no clear rules ever followed, and the policy effectively froze most traditional institutions out of the sector during a time of rising institutional interest.

Under the new policy, banks are still expected to evaluate and manage risks, including market volatility, cybersecurity, money laundering, and consumer protection. But they’re no longer required to seek advance permission before offering services like stablecoin reserves, crypto custody, or node operations on blockchain networks.

The policy change comes just days after the FDIC also removed “reputational risk” from its exam criteria — a vague label that was often cited as a reason to discourage banking relationships with crypto firms.

Trump’s administration has made no secret of its pro-crypto stance, with the president pledging to make the U.S. “the crypto capital of the planet.”