The US Federal Reserve has withdrawn its cryptocurrency guidance from previous years, including requirements for banks to obtain pre-approval before engaging in cryptocurrency activities. This move is in line with the actions of other US banking regulatory agencies, such as the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, which have also reversed their previous policies on cryptocurrency.
As a result, the management and compliance teams of banks will now be responsible for overseeing cryptocurrency matters. The banking industry is awaiting new legislation from Congress to provide clarity on the operation of the digital assets industry in the US. According to the Federal Reserve, this change will ensure that the agency's expectations are aligned with the evolving risks in the banking system and will support innovation. The Federal Reserve's decision will eliminate four pieces of cryptocurrency guidance issued in 2022 and 2023, which highlighted the risks associated with the sector.
Instead, the agency will monitor banks' cryptocurrency activities through its regular supervisory process.