Federal Reserve Reverses 2023 Crypto Restrictions for Banks
The Federal Reserve has permanently rescinded its 2023 policy that imposed strict limitations on banks engaging with cryptocurrency firms. The Board concluded that evolving financial conditions rendered the original rule obsolete. The updated MOVE framework now applies uniformly to all banks under Fed supervision, including both insured and uninsured institutions.
Vice Chair for Supervision Michelle Bowman emphasized the importance of innovation in banking services, stating that new technologies enhance efficiency and customer offerings. The revised policy creates a structured approach for banks to adopt emerging financial products while maintaining systemic stability.
This regulatory shift particularly benefits stablecoin issuers like Circle, Paxos, and Tether, along with custody providers such as BitGo. These firms gain direct access to Federal Reserve accounts for customer reserves, eliminating intermediary banks. The change reduces operational costs, mitigates counterparty risk, and provides greater control over fund flows.
