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. 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.

The Shift in Fed’s Crypto Stance

For 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 due to concerns over volatility, liquidity, and legal risks. However, the Fed’s recent shift, which involves rescinding two supervisory letters issued in 2022 and 2023, marks a change in their stance.

While this change allows banks to support crypto-related activities, including stablecoins, the Fed clarified that regular banking oversight will still apply. The agency stated that it would monitor banks’ crypto-asset activities through standard supervisory processes, without requiring banks to notify the Fed prior to engaging in such activities.

Industry Reactions: A Win for Bitcoin?

The Fed’s decision was met with positive reactions across the crypto space. Michael Saylor, founder of Strategy (formerly MicroStrategy), hailed the move as particularly beneficial for Bitcoin (BTC). He remarked, “Banks are now free to begin supporting Bitcoin,” signaling that Bitcoin could see increased institutional support as a result of this shift.

On the other hand, Alex Svanevik, CEO of blockchain analytics firm Nansen, emphasized that the decision was favorable for banks looking to enter the stablecoin market. He described it as a “good sign” that regulators are adjusting to the crypto landscape rather than trying to block integration.

A Note of Caution: One Guideline Remains

Despite the positive developments, 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. Long warned that this could still pose challenges for the broader crypto sector, though she suggested that passing stablecoin legislation could eventually overturn the remaining guidance.

A Broader Shift in Regulatory Attitudes

The Fed’s stance is part of a broader shift in regulatory attitudes toward crypto. Earlier this year, the OCC also signaled a more pro-crypto approach, giving banks the green light to handle crypto and stablecoin activities. The FDIC, too, has taken steps to investigate the so-called “crypto de-banking” trend under the Biden Administration, further indicating a growing acceptance of crypto within mainstream financial institutions.

Under the Trump Administration, the sector experienced a period of much-needed regulatory relief, and this latest Fed decision appears to continue that trend. The move represents a growing recognition of the role digital assets are likely to play in the future of banking.

Conclusion

The Federal Reserve’s decision to allow banks to support crypto and stablecoin activities is seen as a positive development for the crypto market, particularly for Bitcoin. While it is a step toward greater integration of digital assets into the financial system, the regulatory landscape remains complex, and certain restrictions still apply. If other regulators follow suit, we could see significant advancements for Bitcoin and the broader crypto ecosystem in the coming months.