The Federal Reserve said Thursday evening it will no longer obligate member banks to provide advanced notice of crypto and stablecoin-related ventures, and will instead monitor engagement with digital assets like it would any other banking activities.
The announcement comes weeks after parallel moves by the FDIC and Office of the Comptroller of the Currency, two other key federal banking regulators. Those agencies similarly clarified that banks are legally permitted to engage in crypto-related activities and no longer required to receive explicit permission from regulators to do so.
In January 2023, in the wake of FTX’s historic collapse, the three aforementioned agencies jointly issued guidance strongly discouraging American member banks from engaging with crypto, and ordering them to provide notice of any such intention.
“[T]he agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices,” the joint statement said at the time.
That letter is now also rescinded, per today’s announcement.
FDIC Releases Trove of 'Operation Chokepoint 2.0' Crypto Documents
The Federal Deposit Insurance Corporation unexpectedly released a trove of documents on Wednesday detailing how the agency regulated banks’ approach to crypto. Travis Hill, the FDICS’s acting chairman, said the agency is taking steps to enhance transparency as lawmakers move to investigate a plot dubbed “Operation Chokepoint 2.0.” “The documents that we are releasing today show that requests from these banks were almost universally met with resistance,” he said in a press release. “These and oth...
In the months and years following the institution of said crypto-skeptical banking policies, numerous industry leaders claimed they and their businesses were denied traditional banking services based on their association with the crypto industry alone. Since retaking office, President Donald Trump has made undoing this alleged anti-crypto banking discrimination, dubbed “Operation Chokepoint 2.0,” a top priority.
Tonight, the Federal Reserve officially joined the FDIC and OCC in making a formal shift away from such Biden-era digital asset policies.
In crypto circles, though, some anxiety persisted until today that the Fed would resist making this pivot. The Fed board currently consists of four Democrats and three Republicans, and Fed chair Jerome Powell has shown himself in recent weeks to be willing to act independently of the president’s wishes.
Congress Begins Investigating Crypto Debanking and Operation Choke Point 2.0
The U.S. House of Representatives is officially investigating whether leading crypto firms were secretly “debanked” during the Biden administration. On Friday, Rep. James Comer (R-KY), chair of the House Oversight Committee, informed numerous industry founders and lobbyists that the inquiry is already underway. “The Committee… is investigating improper debanking of individuals and entities based on political viewpoints or involvement in certain industries such as cryptocurrency and blockchain,”...
One crypto banking advocate who requested anonymity in order to speak candidly told Decrypt they had worried the Fed’s Democratic majority, along with Powell, would drag its feet in rescinding Biden-era crypto policies, or potentially resist the move altogether. Today’s announcement shows the central bank is “moving in the right direction,” they said.
Today’s announcement stops short, though, of officially changing the Fed’s policies when it comes to granting crypto-focused banks master accounts, which grant Fed members access to the central bank’s services. Master accounts are crucial for a bank to meaningfully serve customers nationwide. For years, the Fed has resisted granting any such accounts to crypto-focused banks like Custodia and Kraken Financial.
