The U.S. Federal Reserve has taken a significant step toward crypto integration, announcing the rollback of several restrictive policies that once limited banks’ ability to work with digital asset firms.

In an April 24 statement, the Fed confirmed it has rescinded the 2022 and 2023 supervisory letters that forced banks to seek prior approval before engaging with crypto activities or issuing dollar-backed tokens. Now, these ventures will be handled through the standard supervisory process, removing an administrative barrier that had effectively frozen crypto-banking relationships, and allows for more innovation in the crypto space.

What Rules Were Pulled Back?

SR 22-6 / CA 22-6 (August 2022):
This rule told any bank supervised by the Federal Reserve that before they could do anything involving crypto — like offering crypto services or handling digital assets — they had to give the Fed a heads-up first. They also had to prove they had strong systems in place to manage risks and follow the law. Basically, it made working with crypto complicated and slow.

SR 23-8 / CA 23-5 (2023):
This rule specifically targeted banks that wanted to work with “dollar tokens” (stablecoins like USDC or similar). It said that before a state member bank could even get involved with stablecoins, they had to get a special permission slip called a “supervisory non-objection” from the Fed. The bank had to show it could handle the unique risks of dealing with digital dollars safely.

These rules, now rescinded, made it nearly impossible for banks to engage in crypto related projects and investments. With the election of President Trump and his administration friendly approach to crypto, the industry celebrated these changes. 

This move also signals a strategic shift. Instead of warning banks about crypto’s volatility risks—as prior policy statements did—the Federal Reserve, the FDIC, and the OCC are preparing to build new, more balanced guidance. Their goal is clear: to promote innovation without jeopardizing financial stability.

At its core, these changes aim to solve a major obstacle: crypto remains the only major asset class against which banks cannot lend. As David Wells, CEO of Enclave Markets, points out, this lack of lending ability has severely restricted the flow of capital into crypto markets. Without the ability to treat crypto as liquid collateral, large institutions have stayed on the sidelines.

Bridging traditional finance (TradFi) and crypto is necessary to unlock the next phase of digital asset growth. By allowing banks to support crypto assets the same way they support bonds or commodities, real-world assets (RWAs) can be tokenized, traded 24/7, and seamlessly integrated into blockchain systems.

Despite the obvious benefits—greater liquidity, instant settlement, global access—progress has been slow. Regulatory uncertainty, fear of systemic risks, and political resistance have kept the financial system cautious.

However, with a more crypto-friendly political environment emerging and global jurisdictions advancing tokenization efforts, momentum is building. This latest shift from the Fed suggests that the United States may finally be preparing to compete—and lead—in the global race to merge crypto with the real-world economy.