Catenaa, Friday, December 26, 2025-The Federal Reserve withdrew a 2023 policy that restricted state member banks from engaging in certain crypto activities, signaling a shift toward a more flexible approach to digital assets.
The Board replaced the earlier guidance, which strongly discouraged “novel” activities beyond those permitted for national banks, with a framework allowing case-by-case approvals for uninsured state member banks.
Under the updated 2025 policy, insured state member banks remain bound by section 24 of the Federal Deposit Insurance Act.
Uninsured banks can now seek Fed permission to pursue activities previously deemed impermissible, including certain crypto-related operations.
The Fed cited evolving understanding of innovative financial products and services as the reason for the policy change.
The 2023 guidance had effectively limited banks from holding cryptocurrencies like Bitcoin or Ether, issuing stablecoins, or engaging in other emerging digital asset services.
Critics argued it hindered competition and innovation, particularly for special purpose depository institutions such as Wyoming-chartered Custodia Bank, which now may pursue previously restricted activities.
The move is part of broader US regulatory adjustments for digital assets, including the closure of the 2023 crypto bank supervision program and joint guidance from the Fed, OCC, and FDIC on safeguarding crypto holdings.
While some Fed officials expressed concerns over equal treatment across banks with different charters, the updated statement emphasizes that activities presenting different risks should follow tailored regulatory frameworks.
