Federal Reserve Announces Withdrawal of Crypto Regulatory Guidelines

On April 25, the Federal Reserve announced the withdrawal of several documents urging banks to exercise caution when engaging in cryptocurrency and related activities, while simultaneously updating relevant business expectation standards. This news brought positive sentiment to the crypto sphere.

The Federal Reserve stated that it is revoking the supervisory letter issued in 2022, which required state member banks to obtain prior regulatory approval before engaging in crypto asset and stablecoin activities. Also rescinded was the 2023 guidance document on the "no objection" procedure for state member banks participating in dollar token businesses.

According to the previous guidance documents, regulators warned banks to be wary of volatility, legal uncertainties, and liquidity risks when considering whether to offer crypto-related services or accept crypto companies as clients. After the revocation, the Federal Reserve will no longer require banks to file reports on these businesses, instead opting to monitor related activities through regular supervisory procedures.

Furthermore, the Federal Reserve, along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), jointly decided to withdraw two policy statements issued by federal banking regulators in 2023 regarding banks' crypto asset businesses and risk exposures, while urging banks to remain vigilant about cryptocurrency-related risks.

In the statement announcing these changes, the Federal Reserve also indicated that regulators will subsequently investigate whether new guidance "supports innovation, including crypto asset activities."

The Federal Reserve's action to cancel guidance documents marks the latest move by the Trump administration to adopt a more crypto-friendly stance.

Notably, in March of this year, the OCC was the first U.S. banking regulator to take action to make it easier for banks to engage in crypto activities, while also repealing guidelines from the previous U.S. administration that urged banks to remain cautious in the crypto space.

Affected by this positive news, now Bitcoin has surpassed $95,000.