The Federal Reserve (FED) has made a significant turnaround! American banks can confidently offer Crypto Assets services without fear of regulatory penalties.

Michelle Bowman, Vice Chair for Supervision of the Federal Reserve, sent a significant signal at the Wyoming Blockchain Symposium – U.S. banks can provide services to legally operating crypto assets companies without fear of regulatory penalties. This marks a major shift in the U.S. financial regulatory attitude towards blockchain and digital assets, which may pave the way for a deep integration of the crypto industry and traditional banking.

Positive Response to the De-banking Issue

Baumann acknowledged that in the past, due to unclear regulatory standards and conflicting guidelines, crypto assets companies in the United States faced a “de-banking” dilemma.

She revealed that the Federal Reserve (FED) has removed the consideration of “reputational risk” in bank regulations at the end of June, eliminating the barriers for financial institutions to provide services to legitimate digital asset companies.

“Banks should not be punished for providing services to legitimate business clients; the choice of clients should belong to the bank’s management rather than regulatory agencies,” emphasized Bowman.

The Four Major Regulatory Principles Establish a New Direction

Bowman proposed four core principles as the foundation for the Federal Reserve’s future regulation of digital assets:

Regulatory Certainty: Providing clear rules for the industry to reduce uncertainty in investment and collaboration.

Tailored regulation: Assess risks based on different use cases to avoid the worst-case scenario of a “one-size-fits-all” approach.

Consumer Protection: Ensure that products comply with existing laws, including anti-fraud and anti-money laundering regulations.

Maintaining American Competitiveness: Establish a reasonable regulatory framework to ensure that the United States remains at the forefront of global fintech innovation.

From “Excessive Caution” to Embracing Innovation

Bauman stated that the Federal Reserve has shifted from a too conservative attitude to actively exploring the application of blockchain in the traditional banking system.

Technology Integration: Encourage banks to utilize asset tokenization technology to accelerate asset transfers, reduce settlement costs and risks.

Regulatory Reform: Update the inspection manual and regulatory data to ensure the long-term implementation of new policies.

Practical participation: It is recommended that The Federal Reserve (FED) personnel hold a small amount of digital assets to gain practical operational experience, rather than merely staying at the theoretical level.

Stablecoins and Anti-Fraud Collaboration Opportunities

Bowman pointed out that the passage of the “GENIUS Act” will integrate stablecoins into the core of the financial system, having a profound impact on traditional payment channels. She urged the industry and regulatory bodies to collaborate and explore the application of Blockchain in areas such as combating fraud and enhancing transaction transparency.

“Innovation and regulation are not opposed; rather, they are the twin engines for building a modern, high-efficiency financial system,” Bauman concluded.

Conclusion

The Federal Reserve’s change in attitude this time means that the barriers to cooperation between the U.S. banking industry and the crypto assets industry are gradually being eliminated. With increased regulatory certainty and accelerated technological integration, digital assets are expected to be more deeply integrated into the traditional financial system in the future. For crypto companies, this is not only a boon for financing and payments, but it could also be a key turning point for driving mass adoption.