FED lifts block on banks from offering cryptocurrencies

The US central bank, the Federal Reserve, on Wednesday rescinded a policy statement it issued two years ago in 2023 that it said would limit innovation in the banking industry. As a result, the provision of services using crypto assets such as Bitcoin (BTC) has been restricted in this field.

such a document Limited state banks supervised by the FED cannot engage in activities permitted to banks supervised by other agencies. Federal Banking Regulatory Authority. Especially regarding products and services that are considered “innovative” such as in the virtual currency field.

Since the release of the policy statement, the Board’s understanding of the financial system and innovative products and services has evolved, the Fed said. “As a result, the 2023 policy statement is no longer appropriate and has been withdrawn,” he said.

In response to those guidance omissions, the Fed issued a new statement aimed at “promoting responsible innovation” for some banks it oversees. This policy The possibilities for such entities to offer virtual currencies become more flexible. As part of our business and for the benefit of our users.

The new policy statement creates an avenue for both insured and uninsured national banks, which are supervised by government agencies, to undertake certain innovative activities.

Michelle W. Bowman, Vice President for Supervision, commented, “New technology will create efficiencies for banks and improve products and services for bank customers.”

The official also believed that the Fed will help keep the banking sector robust and modern by creating a pathway to responsible and innovative products and services. Cryptocurrency experts such as journalist Eleanor Terret praised the move, which would bring greater freedom.