The Federal Reserve Board announced Thursday that it has withdrawn previous supervisory guidance related to banks’ crypto-asset and dollar token activities, a move intended to better align oversight with emerging risks and foster innovation within the financial sector. The decision marks a notable adjustment in how the central bank will approach digital assets going forward. This followed Fed Chair Jerome Powell’s recent statement that the Federal Reserve would loosen rules on cryptocurrencies.
Among the changes, the Board rescinded its 2022 supervisory letter that had required state member banks to provide advance notification regarding planned or current crypto-asset activities. Instead, oversight will now be integrated into the standard supervisory process. The announcement states:
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 2023 supervisory letter concerning a supervisory nonobjection process for engagement in dollar token activities. Indicating a willingness to revisit its approach as necessary, the Federal Reserve Board explained: “The Board will work with the agencies to consider whether additional guidance to support innovation, including crypto-asset activities, is appropriate.”
The Federal Reserve Board announced Thursday that it has withdrawn previous supervisory guidance related to banks’ crypto-asset and dollar token activities, a move intended to better align oversight with emerging risks and foster innovation within the financial sector. The decision marks a notable adjustment in how the central bank will approach digital assets going forward. This followed Fed Chair Jerome Powell’s recent statement that the Federal Reserve would loosen rules on cryptocurrencies.
Among the changes, the Board rescinded its 2022 supervisory letter that had required state member banks to provide advance notification regarding planned or current crypto-asset activities. Instead, oversight will now be integrated into the standard supervisory process. The announcement states:
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 2023 supervisory letter concerning a supervisory nonobjection process for engagement in dollar token activities. Indicating a willingness to revisit its approach as necessary, the Federal Reserve Board explained: “The Board will work with the agencies to consider whether additional guidance to support innovation, including crypto-asset activities, is appropriate.”
