U.S. Federal Reserve Reassesses Banking Regulation for Cryptocurrencies
In a notable shift in banking regulation, the U.S. Federal Reserve has redefined its supervisory stance concerning banks that deal with cryptocurrencies and stablecoins. On April 24, the Board of Governors announced the cancellation of a supervisory letter issued in 2022, which had instructed state member banks to notify the Fed prior to initiating or continuing any cryptocurrency-related activities.
New Approach to Supervision
This retraction signals a change in how these financial entities will be monitored, allowing them to engage in crypto initiatives without the burden of prior notifications. Instead, their activities will now fall under the routine supervisory framework maintained by the Federal Reserve.
Adjustments to Stablecoin Regulations
Additionally, the Fed has also pulled back a 2023 supervisory letter that outlined conditions for state banks’ involvement in stablecoin-related transactions. This adjustment demonstrates the Federal Reserve’s commitment to refining its regulatory measures in response to the fast-paced advancements in the cryptocurrency sector.
As developments unfold, further updates will be communicated to the public.
