Federal Reserve Rescinds Guidance on Crypto Businesses

The Federal Reserve Board has withdrawn its 2023 guidance restricting uninsured banks from crypto activities, impacting Custodia Bank, as announced on April 24, 2025, from its headquarters.

This change opens new opportunities for banks to engage in cryptocurrency, potentially altering market dynamics and regulatory approaches.

Fed Removes Barriers for Banks Entering Crypto Space

The Federal Reserve Board has officially rescinded its guidance that previously limited uninsured banks from engaging in crypto-related activities. This 2023 guidance was instrumental in blocking Custodia Bank from obtaining a master account. With this rescission, the Fed aims to replace former supervisory practices with standard monitoring protocols.

By removing these restrictions, uninsured banks may now find an avenue to participate more actively within the cryptocurrency ecosystem, echoing the sentiments in the recent Interagency letter on Financial Stability and Risks. Removal of the guidance clears the path for innovation in banking services tied to digital assets.

Market analysts and crypto-enthusiasts have varied reactions to this decision. Some see it as a chance for banks to engage with blockchain technologies, while others express concern about regulatory oversight and risk management in an evolving digital currency landscape. A Federal Reserve Announcement underscores this evolving mindset:

“In light of the withdrawal of the 2023 interagency statements, we are committed to considering additional guidance to support innovation in crypto-asset activities.”

Regulatory Shift Sparks Debate and Market Dynamics

Did you know? The Federal Reserve’s rescission aligns with similar actions taken by the OCC in 2025, which validated banks’ participation in crypto activities, signaling regulatory shifts towards a more integrated supervision framework. You can explore additional details in the OCC news release on financial oversight updates.

Ethereum (ETH), valued at $2,827.80, shows a market cap of $341.30 billion and dominance at 11.76%. Recent trading volume hit $26.06 billion, reflecting a 13.81% change. Notable price drops occurred over the past 90 days, decreasing by 38.31%. Circulating supply exceeds 120.69 million tokens, according to CoinMarketCap.

Coincu’s research team suggests this policy shift may impact financial institutions by fostering technological innovations while maintaining a competitive advantage globally. Historical patterns indicate that such regulatory adjustments often precede enhancements in financial technologies and open new market opportunities for crypto-asset management. Fed rate cut announcements frequently impact crypto markets, causing shifts similar to those anticipated from this policy change.