What You Need to Know:

• The Fed has completed the process of revoking previous crypto guidance regarding banker approvals for crypto activities.
• This decision is partly made to “support innovation.”

The Federal Reserve has officially removed prior advisories related to crypto operations for banks, mirroring the actions of other U.S. banking regulators. With the rescission of previous instructions, including the requirement for banks to acquire pre-approvals for engaging in cryptocurrency activities, the responsibility now lies with bank managers and compliance teams. The industry is now anticipating new legislative measures from Congress to clarify the operational framework for digital assets in the United States.

“These actions ensure that the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system,” stated the Fed in its announcement on Thursday.

In addition to its monetary policy functions, the Fed supervises the banking activities of its state member banks, now shifting its monitoring of crypto activities to standard regulatory processes. The latest update addresses the prior guidance issued during 2022 and 2023, which underlined the sector’s potential risks to financial institutions.

Read More: FDIC Reverses U.S. Crypto Banking Policy That Demanded Prior Approvals