The U.S. Federal Reserve has announced the withdrawal of its crypto guidance for banks that was in effect during 2022 and 2023. This decision could change how banks approach working with cryptocurrencies.
Overview of Guideline Changes
The Federal Reserve has officially rescinded the guidance that required banks to notify or seek approval before engaging in crypto-asset activities. This reversal follows increased regulation after crises, such as the FTX collapse. The decision is also supported by key regulatory bodies, including the FDIC and OCC.
Impact on Crypto Market
The withdrawal of the guidance alleviates compliance burdens for banks. Following the announcement, Bitcoin and Ethereum prices showed modest gains of 1-2%, indicating increased investor confidence in market conditions.
Future Prospects for Banks in Cryptocurrencies
The cancellation of the rules is expected to positively impact the integration of banks with blockchain technologies and crypto markets. It could lead to increased institutional involvement in providing crypto services while adhering to safety standards. This decision suggests a strategic shift towards innovation within the traditional banking system.
The withdrawal of the Federal Reserve's guidance on cryptocurrencies may open new horizons for banks, increasing their participation in the crypto industry and fostering innovations within traditional financial structures.
