The U.S. banking sector is on the verge of a significant shift in its approach to cryptocurrencies, following recent comments from Federal Reserve Chair Jerome Powell. Speaking at The Economic Club of Chicago, Powell indicated that the strict rules and guidance that have governed banks’ involvement with digital assets may soon be relaxed, opening the door for more innovation while maintaining essential safeguards.
A New Era for Crypto in Banking
For years, U.S. regulators have taken a cautious stance on crypto, often requiring banks to seek prior approval before engaging in digital asset activities. This conservative approach was largely a response to high-profile failures and frauds in the crypto space. However, Powell acknowledged that the landscape is changing, with digital assets becoming increasingly mainstream and the regulatory climate evolving to match 1 2.
Powell stated, “We took a pretty conservative, other bank regulators took an even more conservative perspective on the guidance and rules we imposed on banks. I think there will be some loosening of that.” He emphasized that any changes would be made carefully, aiming to foster innovation without compromising the safety and soundness of the banking system or exposing consumers to undue risks 1 2.
Regulatory Updates: FDIC and OCC Move Forward
Recent actions by federal agencies reflect this shift. The Federal Deposit Insurance Corporation (FDIC) has rescinded previous guidance that required banks to obtain explicit approval before engaging in crypto activities. Now, banks can participate in crypto-related services as long as they manage risks appropriately and maintain robust compliance practices 4 5. Similarly, the Office of the Comptroller of the Currency (OCC) reaffirmed that national banks can offer crypto custody and stablecoin-related services, provided they adhere to safety and soundness standards 4 6.
These changes are part of a broader effort by the Trump administration to position the U.S. as a leader in crypto and fintech, encouraging banks to explore new opportunities in digital assets while ensuring regulatory clarity and consumer protection 4 5 6.
Stablecoins in the Spotlight
On Capitol Hill, lawmakers are moving quickly to establish a regulatory framework for stablecoins—digital assets pegged to traditional currencies like the U.S. dollar. Both the House and Senate have advanced stablecoin bills, and President Trump has expressed support for swift action. Powell praised these efforts, noting that stablecoins could have broad appeal if they include strong consumer protections and transparency 1 2.
He remarked, “Stablecoins are a digital product that could actually have fairly wide appeal and should contain consumer protections of the typical sorts and transparency, and that’s what the Senate and the House are working on” 1 2.
What’s Next for Banks and Crypto?
The evolving regulatory environment signals a more open path for banks to engage with crypto, provided they implement effective risk management and compliance measures. This could lead to new financial products, greater integration of blockchain technology, and increased confidence among institutional investors 7.
While the details of the new rules are still being finalized, the message from the Fed and other regulators is clear: responsible innovation in crypto is welcome, as long as it doesn’t compromise the stability of the financial system or consumer safety.
