Fed Drops Crypto Handcuffs—Bitcoin Rally Inbound

Wall Street’s least favorite disruptor just got a green light. The Federal Reserve—yes, the same institution that once treated crypto like a radioactive asset—quietly shredded key restrictions this week. Bitcoin whales are already circling.

Regulators blink first

No more ’special purpose’ banking charters. Fewer capital hurdles for custody services. The 86-page policy shift reads like a surrender document to Satoshi’s army. TradFi lobbyists are reportedly drafting their resignation letters between martinis.

The cynical take

Let’s be real: this ’evolution’ only happened after BlackRock’s ETF racket proved even bureaucrats can’t ignore $100B inflows. The Fed isn’t embracing decentralization—they’re hedging against irrelevance as T-bills lose their monopoly on institutional attention.

What’s next?

Watch for banks to suddenly discover their ’blockchain strategy.’ Meanwhile, Bitcoin’s mining difficulty just hit an ATH—because nothing screams adoption like energy giants repurposing coal plants for hashrate. The revolution will be monetized.

• Fed removes advance crypto notification requirement for banks.
• Federal Reserve eases restrictions on stablecoin activities.
• Regulatory shift supports innovation in the U.S. banking sector.

The Federal Reserve has withdrawn its anti-crypto policies, marking a shift in guidelines toward digital assets and stablecoins. On April 24, 2025 the Federal Reserve announced the removal of restrictions that prohibited banks from crypto asset operations. The Federal Reserve decision supports innovation in the U.S banking sector. 

Federal Reserve Rescinds Crypto Banking Rule

In an official statement, the Federal Reserve eliminated the requirement for state member banks to inform the central bank before any venture in crypto-based activities. In 2022 the Fed issued a guidance that required banks to inform them ahead of digital asset initiatives. After the withdrawal of the supervisory letter, the Federal Reserve will supervise banks’ digital asset operations through its regular framework.

@federalreserve announces the withdrawal of guidance for banks related to their crypto-asset and dollar token activities and related changes to its expectations for these activities: https://t.co/v1MwuswOlE

Furthermore, the Federal Reserve withdrew a 2023 supervisory letter that limited the participation of state member banks in stablecoin activities. The letter expressed concerns about the risks connected to widespread adoption of digital assets such as stablecoins. The supervisory letter listed risks that could disrupt the financial system such as asset instability and payment system issues.

Shift in Digital Asset Regulation

The Federal Reserve’s decision follows similar actions from other federal banking regulators such as the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). These agencies have withdrawn their 2023 joint statements that warned banks not to deal with firms involved in digital asset scams. The joint statements cautioned that inaccurate disclosures by crypto firms could hurt investors and the financial markets.

The decision matches the Trump administration’s efforts to build friendly regulations for crypto businesses. The actions build on efforts to promote innovation and develop an inclusive financial system. The Federal Reserve’s decision reflects the increased acceptance of blockchain and crypto innovations to improve banking and financial operations.

The Federal Reserve’s move follows the Securities and Exchange Commission (SEC) decision to remove a rule that required financial firms to list digital assets as liabilities. The rule made it difficult for financial institutions to enter the crypto banking market which slowed digital asset adoption. The decisions by the Federal Reserve and SEC could boost growth of banks in the digital asset industry.

Experts believe this adjustment will help boost the integration of digital assets with  traditional finance. The decision enables banks to offer more digital asset services which include digital assets custody and stablecoin transactions. The Federal Reserve’s updated policies could foster innovation amid the increased demand for digital assets across the world.