The Federal Reserve, led by Jerome Powell, announced that U.S. banks can engage in cryptocurrency activities, potentially transforming the financial landscape.
Authorization for Crypto Operations
On June 24-25, 2025, Federal Reserve Chair Jerome Powell announced a policy allowing U.S. banks to conduct cryptocurrency operations, provided they adhere to strict safety protocols. This marks a significant change in U.S. regulatory policy.
Market Response to Fed's Decision
Powell's statements led to a strong market reaction, with institutions investing over $588 million in Bitcoin ETFs. Additionally, approximately $71 million flowed into Ethereum ETFs. Bitcoin's price surged past $105,000, reflecting increased investor confidence.
Broad Implications for Financial Markets
The regulatory change has significant implications across multiple sectors. Politicians, such as Senator Cynthia Lummis, emphasized the need for regulatory evolution. Additionally, stablecoin legislation is also likely to progress. This policy shift is gaining traction due to the growing legitimacy of cryptocurrencies, affecting Bitcoin, Ethereum, and other digital assets.
Powell's announcement has the potential to expand institutional participation in the crypto market and enhance regulatory clarity, leading to technological advancements and increased investor confidence.
