US Central Bank Withdraws Barrier to Crypto Banking Services
The US Federal Reserve has eliminated a key regulatory hurdle, formally retracting a 2023 statement that blocked its supervised banks from crypto involvement. This step continues a trend of US regulatory bodies taking a more constructive approach to digital assets.
The now-defunct guidance enforced a uniform standard, compelling state banks without federal insurance to comply with the stricter rules applied to insured national banks. The doctrine held that equivalent risks demand equivalent regulatory treatment.
For uninsured institutions, this meant any crypto service offerings were forbidden, as those activities were prohibited for national banks. This restriction directly disqualified them from obtaining essential access to the Federal Reserve’s payment system.
The Fed explained that the policy reversal stems largely from its current irrelevance. The Board cited an evolved financial system and a deeper understanding of innovative products like Bitcoin and Ethereum as factors.
“As a result, the 2023 policy statement is no longer appropriate and has been withdrawn,” it announced. Caitlin Long, founder and CEO of Custodia Bank, welcomed the development, stating this policy was the basis for the rejection of her bank’s master account application last year.
