The Federal Reserve Board (Fed) has announced the withdrawal of guidance for banks related to their crypto-asset and dollar token activities, marking a significant shift in the regulatory landscape. The recent shift is seen as a welcome development, sparking excitement in the financial industry.
Banks to Freely Offer Crypto Services
Previously, the Federal Reserve had issued guidance that discouraged banks from engaging in crypto-asset activities, citing concerns about risk management and consumer protection. However, with the rapid growth of the crypto industry, the Fed has decided to revisit its stance. The withdrawal of the guidance means that banks will now have more freedom to explore crypto-asset activities, subject to their own risk management and compliance protocols.
This change allows banks to develop their own risk management protocols and compliance procedures, subject to regulatory oversight. The move is seen as a response to the growing importance of digital assets in the financial system and the need for clearer regulatory guidelines.
Crypto Sees Favorable Regulatory Shifts
This regulatory shift has thrilled the crypto community, which has lauded it and viewed it as a positive step towards greater adoption and improvement. Many experts believe that this change will encourage more banks to enter the crypto space, increasing mainstream acceptance and usage.
The implications of this decision are far-reaching. As banks begin to explore crypto-asset activities, crypto-based loans and investment products may be anticipated.
Meanwhile, the crypto-friendly nature of the Trump administration seems to rub off in many angles. As the Fed shifts regulatory ground to allow for some freedom, like adjusting its stance on financial issues such as the use of fintech and digital payments, the U.S. SEC is also ending several crypto-related lawsuits. For example, the SEC recently dismissed its lawsuit against Nova Labs, the creator of the Helium Network, with prejudice, which means that the allegations cannot be reintroduced in the future.
The regulatory watchdog also dismissed its lawsuit against the American-based crypto exchange Kraken, which marks another significant victory for the crypto industry in the U.S. and beyond.
