Fed removes two crypto rules impacting banks in 2025

The Federal Reserve has officially withdrawn two supervisory letters from 2022 and 2023 that previously required state member banks to notify regulators before engaging in crypto-asset and stablecoin activities.

This move aligns the Fed with other major U.S. banking regulators, including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, which had already rescinded similar guidance earlier this year.

“The Board is rescinding its 2022 supervisory letter establishing an expectation that state member banks provide advance notification of planned or current crypto-asset activities,” according to the Fed’s announcement on April 24.

With these withdrawals, the Fed will now oversee crypto-related activities through its standard supervisory process rather than requiring advance notice or special approval from banks.

The original guidance, issued during a period of heightened concern following several crises in the crypto sector in 2022, had flagged risks related to safety and soundness, consumer protection, and potential threats to financial stability.

At the time, the Fed warned that “certain types of crypto-assets, such as stablecoins, if adopted at large scale, could also pose risks to financial stability including potentially through destabilising runs and disruptions in the payment systems.”

The agencies also cited concerns about money laundering and counter-terrorism financing within the crypto sector.

The recent policy change comes as the banking sector awaits further clarity from Congress on the regulatory framework for digital assets in the United States.

“The actions taken ensure that the Board’s expectations remain consistent with the changing risks and further support innovation within the banking sector,” Fed statement noted.

The withdrawals represent the first significant step by the Fed regarding crypto under the Trump administration, which has signaled support for easing restrictions on digital asset activities.

Officials say they will continue to monitor banks’ crypto activities through regular supervisory channels and may consider new guidance in the future if needed.