Federal Reserve withdraws 2023 policy statement, paving the way for banks to participate in crypto innovation

ChainCatcher reports that, according to Eleanor Terrett, the Federal Reserve officially revoked its policy statement on Wednesday and issued a new policy to create conditions for regulated banks to participate in innovative financial activities. The policy change removed the previous restrictions that hindered uninsured banks from becoming Federal Reserve members and engaging in cryptocurrency activities, which was the basis for the Fed’s rejection of Custodia Bank’s main account application. Federal Reserve Vice Chair for Supervision Michelle W. Bowman stated, “New technologies provide banks with efficiency and offer better products and services to customers. By creating pathways for responsible innovative products and services, the Federal Reserve ensures that the banking industry can modernize, become more efficient, and effective while maintaining safety and soundness.”