- Federal Reserve removes guidance on banks’ crypto activities.
- Jerome Powell supports innovation, emphasizing safety.
- Markets respond with Bitcoin and Ethereum price increase.
The withdrawal may spur increased crypto market and institutional engagement.
The Federal Reserve Board, along with the FDIC and OCC, has rescinded guidance restricting banks’ crypto-asset activities. Chair Jerome Powell emphasized a balanced approach supporting innovation while maintaining safety. This aligns with the current administration’s objective to encourage lawful bank involvement in blockchain sectors.
“We took a pretty conservative…perspective on the guidance and rules we imposed on banks. I think there will be some loosening of that. We’ll try to do it in a way that preserves safety and soundness, but that permits and fosters appropriate innovation, but does so in a way that again doesn’t put consumers at risk in ways they don’t understand or make banks less safe and sound.” — Jerome Powell, Chair, Federal Reserve, CoinDesk
The move is expected to significantly alter institutional behaviors, potentially increasing participation in crypto custody and trading. Increased regulatory clarity looks set to boost market optimism, evidenced by the upward trend in Bitcoin and Ethereum prices following the announcement.
The policy shift has multifaceted implications for both the financial and technological spheres. With the removal of previous notification requirements, banks might increasingly integrate crypto operations. This change in stance could foster a broader financial engagement and reestablish the U.S. as a key player in crypto-market innovation.
Analysts anticipate further developments as regulators adjust their frameworks to accommodate innovative financial technologies. Historical cycles suggest that similar deregulatory measures
often lead to increased market activity, reinforcing the U.S.’s position as a competitive force in the digital asset industry.
| Disclaimer: The content on The CCPress is provided for informational purposes only and should not be considered financial or investment advice. Cryptocurrency investments carry inherent risks. Please consult a qualified financial advisor before making any investment decisions. |
