The Federal Reserve Board announced Thursday a significant shift in its oversight of banks engaging in crypto asset and stablecoin activities, withdrawing previous guidance and altering its expectations for these engagements.
In a statement, the central bank indicated the move is intended to ensure its supervisory approach adapts to the evolving risks within the digital asset space while fostering innovation in the banking system.
A key aspect of this policy adjustment is the immediate rescission of a 2022 supervisory letter that mandated state member banks to provide advance notification of any planned or ongoing crypto asset activities. Under the revised framework, banks will no longer be required to submit such communications.
Furthermore, the Fed is also revoking a 2023 directive concerning the non-objection process for state member banks involved in stablecoin activities. This eliminates the prior requirement for financial institutions to seek pre-approval before participating in such ventures. Oversight of these activities will now fall under standard regulatory supervision, without the need for pre-clearance.
The Federal Reserve will also join the Federal Deposit Insurance Corporation (FDIC) in withdrawing two joint statements issued in 2023 by federal bank regulatory agencies. These statements had outlined the regulators’ perspectives on the risks associated with crypto-asset exposures and offered preliminary guidance for banks operating in those markets.
Following these changes, the Fed stated it will collaborate with relevant agencies to assess the necessity of additional or updated guidance to support innovation in crypto-related activities.
