The FRS lifts restrictions on banks working with cryptocurrencies: a new chapter for the industry
The U.S. Federal Reserve has officially removed key restrictions that previously stopped banks from fully joining the cryptocurrency industry. This move is part of a broader plan to support innovation in the financial sector and could change how traditional banks deal with digital assets.
The end of strict regulation
According to a statement on the FRS’s official website, it has removed the 2022 oversight rules that required banks to notify the regulator before starting any crypto-related activities. It also ended the 2023 rule that needed separate approval for working with stablecoins.
Now, banks' crypto operations will be managed under the regular supervision process, just like other financial activities. This makes it much easier for banks to enter the crypto space and launch new products and services based on digital assets.
Working with other regulators
At the same time, the FRS, together with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), has withdrawn two joint statements released last year about the risks of cryptocurrencies. This shows a shift in the approach to regulation — from limiting innovation to supporting and adapting to it.
This also connects to the U.S. Securities and Exchange Commission (SEC) canceling the SAB 121 rule in January 2025. That rule required companies holding crypto for customers to list those assets on their balance sheets as liabilities, which increased operational risks. Now that this rule is gone, banks can build crypto services without heavy reporting pressure.
Market reaction and outlook
The market reacted calmly to the news. Bitcoin is trading at $93.6K, showing a 1.5% gain in the last 24 hours. The total crypto market cap slightly dropped by 0.2%, even though most top assets are up. Cardano (+5%) and Stacks (+20%) saw the biggest gains. TKX fell slightly (-1.4%).
The FRS’s removal of these restrictions may mark the start of a new phase in the relationship between traditional banks and the crypto industry. These changes send a message: digital assets are no longer seen as a threat, but as a possible driver of growth and improvement in financial services.
