Recent changes in the Federal Reserve's policy are opening new opportunities for banks to actively engage with cryptocurrencies.
Regulatory Approach Change
Federal Reserve, under Jerome Powell's leadership, has changed its oversight policy by removing certain barriers for banks dealing with cryptocurrencies. "The U.S. Federal Reserve has announced that it will no longer consider 'reputational risk' in its oversight of banks, making it easier for them to onboard clients from the crypto sector," Powell stated.
Impact on the Financial Industry and Crypto Banking Services
The changes are expected to lead to an increase in banking services for cryptocurrency transactions, custody offerings, and other crypto-related services. The new policy aims to reduce prior barriers and enhance institutional involvement in the crypto space.
Prospects for Integration of Traditional and Digital Financial Systems
With forthcoming actions from banks, expert opinion suggests a potential boost in crypto liquidity on U.S. platforms. Historical data indicates that similar policy shifts have previously led to deeper integration of traditional and digital financial systems, benefitting major cryptocurrencies and stablecoins.
The revised policy of the Federal Reserve points to the strengthening ties between traditional banking and digital finance, which may foster growth and innovation in the financial sector.
