Deregulation of crypto, Federal Reserve and other institutions withdraw relevant guidance from the banking industry

The Federal Reserve announced on Thursday that it was withdrawing its regulatory guidance for banks' crypto-asset and dollar token businesses and updating the relevant business expectations standards. The move is aimed at ensuring that regulatory requirements keep pace with the evolution of risks and further support banking system innovation. According to the announcement, the Federal Reserve officially repealed the regulatory letter issued in 2022, which previously required state member banks to provide advance reporting on proposed or existing crypto-asset businesses. After the withdrawal, the Federal Reserve will no longer require banks to fulfill their reporting obligations and will instead monitor related activities through regular regulatory procedures. Also repealed is the 2023 guidance document on state member banks' participation in the "regulatory no-objection" process for dollar token business. In addition, the Federal Reserve and the Federal Deposit Insurance Corporation jointly decided to withdraw from two policy statements on banks' crypto-asset businesses and risk exposure jointly issued by the federal banking regulator in 2023. The Office of the Comptroller of the Currency has previously withdrawn from the statement. The Fed said that in the future, it will work with other regulators to evaluate the need for a new guidance framework to support innovation, including crypto-asset businesses.