- The Fed Greenlighted Banks to support crypto and stablecoin activities.
- However, regular bank overview still applies.
The Fed moved in earlier guidelines that warned banks against entering into crypto, stablecoins and related activities.
On April 24, the American bank regulator said that the step was to ‘support innovation’ in the sector,
“These actions ensure that the expectations of the board are tailored to the evolving risks and further support innovation in the banking system.”
The office has withdrew two supervisory letters in 2022 and 2023.
These earlier guidelines, together with other supervisors, the FDIC and OCC, warned banks of volatility, liquidity and legal risks of performing crypto-asset and stablecoin activities.
Great for Bitcoin?
The shift of the FED and the softer position on bank support for crypto activities was well received by the industry. In fact, Michael Saylor, founder of strategy (formerly micro strategy), view The movement as a great for bitcoin [BTC].
“Banks are now free to support Bitcoin.”
For his part, Alex Svanevik, CEO of Blockchain Analytics Nansen, said That the update was great for banks that came to the Stablecoin market.
“Good news if you want large banks in the Stablecoin game, and a sign that supervisors are adapting instead of blocking Crypto integration.”
However, the FED noted that bank tand regularly will still apply to crypto activities.
“The board will no longer expect banks to provide a notification and, instead, check the crypto-asset activities of banks through the normal supervisory process.”
Caitlin Long, founder of Custodian Bank, however noted That the Fed did not withdraw any anti-crypto guidelines that was published in 2023 through a voice from the council.
She warned that it was not over, but approving the Stablecoin law could destroy the guidance.
That said, in March the OCC (office of the Currency of the Currency) was the first to signal a pro-crypto shift And stated that banks could handle crypto and stablecoins.
This is followed by the FDIC (Federal Deposit Insurance Corporation) the example and an investigation started the infamous Crypto de Banking Under the Biden administration.
Under the Trump government, the sector has enjoyed much needed legal lighting.
