TLDR
- Fed drops crypto rules, streamlines bank oversight.
- Banks no longer need crypto pre-approval.
- Outdated guidance gone, new path begins.
- Digital assets move under standard supervision now.
- Joint statements pulled, agencies shift regulatory tone.
The Federal Reserve Board has officially withdrawn its prior supervisory guidance regarding banks’ involvement in crypto-asset and stablecoin-related activities. The decision aims to update the regulatory approach in response to emerging risks and changing conditions in the financial sector. The withdrawal includes the cancellation of key supervisory letters issued in 2022 and 2023 and the termination of joint statements with other federal regulators.
The 2022 supervisory letter had required state member banks to provide advance notification to the Federal Reserve before engaging in any crypto-asset activities. This requirement is now revoked. The Federal Reserve clarified that it will monitor crypto-related operations under its existing supervisory framework rather than through a separate notification process. This adjustment is intended to streamline oversight without altering the scope of supervision.
Rescission of Supervisory Letters and Joint Statements
In addition to the 2022 letter, the Federal Reserve has rescinded a 2023 supervisory letter that addressed the supervisory non objection process for banks seeking to engage in stablecoin or dollar token activities. The removal of this letter signifies a move away from requiring prior approvals for such activities, shifting oversight entirely to the ongoing supervisory process.
Moreover, the Federal Reserve, in coordination with the Federal Deposit Insurance Corporation (FDIC), has withdrawn from two 2023 joint statements previously issued alongside the Office of the Comptroller of the Currency (OCC). These joint statements had outlined regulators’ views on the risks associated with crypto-asset exposures and provided initial guidance for banks participating in such markets. The withdrawal signals a unified shift in the stance of federal banking agencies toward more integrated supervision of crypto and stablecoin activity.
Path Forward for Banking Innovation and Supervision
The Federal Reserve emphasized its intention to continue supervising banks’ involvement in digital asset markets, including crypto-assets and stablecoins. This approach aligns with the broader strategy of fostering responsible innovation within the financial system.
The Board will coordinate with the FDIC and the OCC to assess whether additional guidance is necessary to support responsible participation in digital asset-related activities. The agencies plan to evaluate the need for updated frameworks that reflect market developments and the evolving risk landscape.
The updated regulatory position reflects the Federal Reserve’s efforts to modernize its approach to oversight, ensuring that it remains aligned with the rapid evolution of financial technologies and the growing intersection between traditional banking and digital assets.
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