The US Federal Reserve Takes Significant Step for Cryptocurrency Industry
The US Federal Reserve has taken an important step for the cryptocurrency industry. Accordingly, the FED announced that it has withdrawn the regulatory restrictions that banks have imposed on cryptocurrency and stablecoin activities.
The Federal Reserve announced that it has rescinded its 2022 and 2023 audit letters requiring state member banks to provide advance notice of their cryptocurrency and stablecoin activities.
The FED announced that from now on, such activities will be supervised through the standard supervisory process and that it will adopt a more flexible approach to the activities of banks.
“The Federal Reserve Board announced on Thursday that it has withdrawn its guidance on banks’ crypto-asset and dollar token activities and made related changes to its expectations regarding these activities. This ensures that the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system.”
As a result, the Fed will no longer wait for banks to report and will instead monitor banks’ cryptocurrency activities through its normal supervisory process.
Finally, the Fed added that it will collaborate with U.S. agencies to assess whether additional guidance is needed to support innovation, including cryptocurrency activities.
While this move by the FED was welcomed by the cryptocurrency industry, famous Bitcoin bull Michael Saylor said in his post, “Banks can now start supporting Bitcoin.”
*This is not investment advice.