Fed Eases Crypto Rules for State Member Banks

The Federal Reserve announced on December 17, 2025, that it has withdrawn a restrictive 2023 policy statement limiting state member banks' involvement in cryptocurrency and digital asset activities, replacing it with new guidance that opens pathways for both insured and uninsured banks to pursue such innovations under standard supervisory oversight.

The 2023 statement had imposed a presumption that state member banks could engage only in activities permitted for national banks, effectively barring many from crypto-related services like custody, tokenization, and stablecoin operations without prior approval. It also required notifications and approvals for handling dollar tokens or other digital assets, creating barriers particularly for smaller, uninsured institutions seeking access to Federal Reserve master accounts and payment systems. The policy stemmed from concerns over liquidity, governance, and operational risks in the emerging crypto sector.

Under the updated 2025 policy, the Fed applies a principle of "same activity, same risks, same regulation," tailoring oversight to specific risks rather than imposing blanket restrictions. Insured banks must still adhere to limits...