The post Fed rescinds crypto guidance for banks in bid to streamline oversight and support innovation appeared on BitcoinEthereumNews.com.

Key Takeaways The Fed formally withdrew key guidance that governs how state member banks must handle crypto and stablecoin activities. Regulatory bodies are collaborating to support innovation in crypto-asset activities while ensuring risk management. The Federal Reserve Board announced Thursday that it is withdrawing key supervisory guidance on crypto and stablecoin activities for state member banks, streamlining oversight to support innovation while maintaining safety standards. The first guidance document, released in August 2022, aimed to mitigate novel risks arising from the rapidly growing crypto sector. It required state member banks to notify the central bank before initiating or continuing crypto-asset-related activities. Following the 2022 guidance, in February 2023, the Fed issued a new letter outlining a supervisory non-objection process for banks considering engaging in activities involving stablecoins. Banks were required to receive written confirmation from the Fed before initiating such activities and to demonstrate adequate systems and controls to manage operational, cybersecurity, liquidity, compliance, and consumer protection risks. The Fed’s decision to retract the guidance means banks are no longer required to provide advance notification or seek supervisory non-objection before engaging in crypto-asset and stablecoin activities. These activities are now monitored through the central bank’s standard supervisory process. The Fed, alongside the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), also revoked two joint statements issued in 2023 addressing risks in banks’ crypto activities. In withdrawing these requirements, the Fed has signaled a willingness to adapt its regulatory approach. The Board pledged to continue working with other agencies to determine whether additional guidance is needed to support financial system innovation. Federal regulators scale back crypto restrictions for banks amid policy shift Key federal banking regulators have rolled back oversight mechanisms on crypto banking activities, falling in line with President Trump’s promise to dismantle…

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Filed under: News - @ April 25, 2025 2:22 am