A recent policy shift by the Federal Reserve has brought a wave of optimism to the cryptocurrency market, particularly impacting XRP.
Optimism in Crypto Markets
On June 23, the Federal Reserve announced it would no longer consider 'reputational risk' in its examinations of banks. This move is seen as a step towards regulatory clarity, removing barriers for crypto-friendly banks. XRP responded sharply, rising by 6% to trade at $2.14.
Impact on XRP
XRP's connection to the banking sector is significant, as its use in money transfers and transactions often requires partnerships with financial institutions. Many U.S. banks previously avoided direct exposure to crypto, citing reputational concerns. The regulatory change now opens clearer pathways for banks to engage with blockchain infrastructure providers.
New Regulatory Opportunities
The Federal Reserve emphasizes that while reputational risk will be excluded from examination criteria, banks must still adhere to strong risk management practices. This means that as long as banks maintain financial and operational standards, their decisions to serve crypto firms cannot be challenged on vague reputational grounds.
The Fed's policy change signals a growing openness among U.S. regulators to cryptocurrency banking access, potentially facilitating XRP's integration into real-world applications.
