The U.S. Federal Reserve has retracted its previous cryptocurrency guidance issued to banks, following similar actions by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). The Fed's decision aims to foster innovation within the banking sector by removing obstacles that required banks to secure pre-approval from regulators for crypto-related activities. As a result, the responsibility for managing crypto matters has shifted to the banks’ internal compliance and management teams. The Fed clarified that it will now oversee banks' crypto-asset activities through standard supervisory processes rather than through specific guidance. This policy reversal comes amidst calls for more comprehensive legislative clarity about the operation of digital assets in the United States, as the banking industry awaits new laws from Congress to address these issues. The Fed's withdrawal of four key pieces of crypto guidance highlights its intention to align regulatory expectations with evolving market risks.

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