Fed Opens Crypto Doors to All Banks, Ends 2023 Guidance

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Federal Reserve Opens Crypto Doors to All Banks, Ends 2023 Guidance

Written by Aaron S.,

Editor-In-Chief

Last Updated: December 18, 2025

Key Takeaways

The Federal Reserve has revoked a 2023 policy, which allowed more US banks, insured or not, to seek approval for cryptocurrency services;
Non-federally insured banks can now engage in crypto activities, such as stablecoin payments, if they meet oversight and risk standards;
Fed Governor Barr warns that this shift could create regulatory loopholes and lead to riskier behavior in less-regulated banking industries.

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Federal Reserve Opens Crypto Doors to All Banks, Ends 2023 Guidance

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On December 18, the Federal Reserve revoked a policy that had prevented some US banks from engaging in cryptocurrency services.

This decision replaces guidance issued in January 2023. The policy withdrawal means that insured and uninsured banks overseen by the Federal Reserve face the same process for seeking approval to get involved with cryptocurrencies.

The statement issued by the Federal Reserve clarifies that the previous guidance no longer lines up with the regulator's current position on which financial offerings are suitable for different types of banks.

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Under this new framework, non-federally insured banks are no longer barred from pursuing activities such as stablecoin payments and digital asset custody if they secure the necessary approvals and demonstrate sufficient risk management.

Fed Governor Michael Barr raised concerns about the change. Barr argued this might introduce regulatory arbitrage by allowing banks outside the federal deposit insurance system to take on digital asset activities that would otherwise be restricted for federally insured banks.

He warned that this could affect stability and the competitive balance in the banking industry. Barr said in an official statement released on December 18:

Permitting uninsured banks to engage in these crypto-asset-related activities on terms different from those that apply to insured banks could drive more risky strategies to less regulated corners of the banking system.

US Democrats Elissa Slotkin and Jerry Moran have introduced a new bill, the Strengthening Agency Frameworks for Enforcement of Cryptocurrency (SAFE) Act. What does the bill cover? Read the full story.