By USA Goldmines 
The Federal Reserve Board on Thursday announced the withdrawal of guidance for banks related to their crypto asset and stablecoin activities, with changes to its expectations for these engagements.
According to a statement, the move aims to ensure its supervisory approach remains aligned with evolving risks and to support innovation within the banking system further.
Policy Changes
As part of this shift, the Board is rescinding its 2022 supervisory letter. The directive had required state member banks to provide advance notification of any planned or ongoing crypto asset activities. Under the new rules, banks will no longer be expected to submit such communications.
The Fed is also revoking a similar order from 2023 regarding the non-objection process for state member banks engaging in stablecoin activities. This eliminates the requirement for financial institutions to obtain prior approval before participating in such activities.
Oversight will now fall under standard regulatory supervision, with no need for pre-clearance
Additionally, the Federal Reserve, together with the Federal Deposit Insurance Corporation (FDIC), is withdrawing from two joint statements issued in 2023 by federal bank regulatory agencies. These communications had outlined the regulators’ views on the risks associated with crypto-asset exposures and provided preliminary guidance for banks operating in those markets.
Following the adjustments, the Fed will now work with the relevant agencies to evaluate whether additional or updated guidance is needed to support innovation on crypto-related activities.
This strategy reversal comes just weeks after the Office of the Comptroller of the Currency (OCC) made a similar move. The federal banking regulator also rolled back restrictions that had limited the involvement of financial institutions with crypto assets.
Before these policies were introduced, some industry figures had claimed that they and their businesses were denied traditional banking services solely because of their association with the digital asset industry. These allegations formed the basis of what came to be known as “Operation Chokepoint 2.0.”
Positive Industry Developments
Thursday’s decision is the latest in a series of favorable outcomes for the crypto industry under the Trump administration. Earlier this month, the U.S. Department of Justice (DOJ) announced it would no longer pursue criminal charges against crypto exchanges, developers, or users involved in regulatory violations.
That development followed the disbanding of the National Cryptocurrency Enforcement Team (NCET), a specialized DOJ unit that had previously handled crypto-related criminal cases.
In February, the Securities and Exchange Commission (SEC) reduced the size of its department responsible for crypto prosecution. The Commodity Futures Trading Commission (CFTC) also downsized its digital asset enforcement teams in January, leaving just two groups to handle relevant cases.
The post Fed Lifts Crypto Restrictions for Banks in Landmark Shift appeared first on CryptoPotato.
Banks no longer need Fed approval for stablecoin operations as regulators shift to standard supervision, marking a win for crypto innovation. AA News, Crypto News, Federal Reserve, Regulations, United States
This articles is written by : Nermeen Nabil Khear Abdelmalak
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