The Federal Reserve Removed Outdated Crypto Banking Restrictions, Paving the Way for Innovation

The Federal Reserve Board announced Thursday that it has withdrawn previous supervisory guidance related to banks' crypto-asset and dollar token activities

The Federal Reserve Board on Thursday announced the withdrawal of previous supervisory guidance concerning banks' crypto-asset and dollar token activities. This move is part of the central bank's broader effort to align its oversight with emerging risks and technological advancements in the financial sector.

The Board has rescinded its December 2022 supervisory letter that required state member banks to provide notification regarding planned or current crypto-asset activities. This integration will see its oversight over these activities routinely covered in the standard supervisory process.

The announcement adds: “As a result, the Board will no longer expect banks to provide notification and will instead monitor banks' crypto-asset activities through the normal supervisory process.”

Additionally, the Board revoked its March 2023 supervisory letter concerning a supervisory nonobjection process for engagement in dollar token activities.

The Federal Reserve Board stated that it will closely monitor the new administrative pr