Federal Reserve withdraws restrictive 2023 policy severely limiting ‘novel’ crypto activities

The Federal Reserve has withdrawn its restrictive 2023 Policy Statement, which created a strong presumption against state member banks engaging in "novel" crypto activities beyond what national banks permit. The Fed stated this change reflects "evolving views on risks" and changes in the financial system since 2023. Under the new 2025 Policy Statement, insured state member banks remain subject to existing strict limits, but uninsured state member banks can now seek Fed Board permission for activities not permissible for insured banks on a case-by-case basis. This move follows other recent regulatory adjustments easing crypto restrictions, though it contrasts with previous unanimous support for the 2023 policy, which had effectively barred activities like holding Bitcoin on balance sheets or issuing stablecoins. The change may impact firms like Custodia Bank, whose access to a Fed Master Account was previously underpinned by the 2023 guidance.

(Source：The Block)