US Federal Reserve Allows Banks to Engage in Crypto and Stablecoin Activities

In a significant move, the U.S. Federal Reserve has rolled back previous anti-crypto guidance, now permitting banks to engage in crypto and stablecoin activities.

The U.S. Federal Reserve has quietly rescinded previous anti-crypto guidance, now permitting banks to engage in crypto and stablecoin activities, according to a recent report by Blockware. This decision, made on April 24, 2025, is seen as a step toward supporting innovation in the financial sector, with the Fed noting that it aims to align expectations with the evolving risks in the banking system.

Over the past few years, U.S. regulators, including the Federal Reserve, the FDIC (Federal Deposit Insurance Corporation), and the OCC (Office of the Comptroller of the Currency), have expressed caution regarding banks’ involvement in crypto assets and stablecoins. Concerns ranged from the volatility and liquidity of crypto markets to legal risks. However, the Fed’s recent move, which involves rolling back two supervisory letters issued in 2022 and 2023, signals a shift in their stance.

While allowing banks to support crypto-related activities, including stablecoins, the Fed noted that regular banking oversight will still apply. The agency stated that it would monitor banks’ crypto-asset activities through standard supervisory processes, and banks are not required to notify the Fed prior to engaging in such activities.

This change in the Fed’s stance could have significant implications for the crypto market. Michael Saylor, founder of Strategy (formerly MicroStrategy), pointed out that the decision allows banks to begin supporting Bitcoin (BTC).

“Good news! The Fed has now cancelled all of its prior advisories to banks re: crypto. This means that banks are now free to begin supporting Bitcoin. They will not be able to ignore the best investment over the last 15 years any longer!” Saylor stated.

Alex Svanevik, CEO of blockchain analytics firm Nansen, added that the decision is also favorable for banks looking to enter the stablecoin market.

“This is a good sign that regulators are adapting to crypto, rather than trying to shut it down or pushing for more time to stall integration,” Svanevik noted.

However, Caitlin Long, founder of Custodian Bank, cautioned that the Fed did not rescind all anti-crypto measures. A key piece of guidance issued in 2023 via a Board vote remains in place, which could still present challenges for the broader crypto sector.

“They did NOT cancel the 2023 (Board-voted) guidance (still no new guidance from the Board). So, still no BDCs, no SPVs, and no 'material portion' of a bank's business being funded by 'digital assets.' Congress will need to pass the stablecoin bill to get the remaining guidance cancelled,” Long explained.

The FDIC, which is a key regulator of commercial banks, has also been taking steps to investigate the so-called “crypto de-banking” trend under the Biden Administration. Recently, the FDIC announced an inquiry into the practices of several large banks, part of an effort to understand how the rapid growth of the crypto industry is affecting banking services.