Why The Fed Saying “Yes” to Crypto Banks Might Just Break the Internet (Or Not)

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  • The Fed just gave banks the green light to frolic in crypto and stablecoin pastures. 🤑
  • Don’t get too wild though, normal banking babysitters are still watching closely. 👀

In a plot twist worthy of a late-night comedy, the Fed has decided it no longer fears crypto like last season’s fashion disaster and pulled back its earlier warnings against banks cozying up to crypto and stablecoins.

On April 24th, the U.S. banking overlords (also known as regulators) claimed this about their sudden change of heart: 

“We’re just trying to keep up with the times — innovation and all that jazz — without letting the whole system collapse like a poorly coded website.”

To make this official, they tore up two dreadful letters from 2022 and 2023 that basically told banks, “Don’t do crypto, it’s scary, and you might lose your lunch money.”

Those earlier missives, crafted painstakingly with the FDIC and OCC sidekicks, warned banks that crypto’s volatility was like a rollercoaster built by an enthusiastic toddler: unpredictable, confusing, and occasionally disastrous.

Good news for Bitcoin fanboys?

Market prophets like Michael Saylor, who apparently moonlights as a Bitcoin cheerleader, are ecstatic. He cheerfully proclaimed that banks can now freely hug Bitcoin like it’s a long-lost puppy.

“Banks are now free to begin supporting Bitcoin.” (Cue the celestial choir.)

Meanwhile, Alex Svanevik, the wizard behind blockchain analytics at Nansen, sees bright shiny coins dancing in the eyes of bankers eager to dive into the stablecoin pool.

“If you’re a big bank eyeing stablecoins, pop the champagne—regulators are starting to say ‘maybe’ instead of ‘never’.”

But before you start daydreaming about crypto-fueled trips to Mars, the Fed calmly reminded everyone that they’ll still keep their usual skeptical eye on all these crypto shenanigans through traditional supervision channels. No more need to alert the Fed every time you buy a Bitcoin-shaped donut though.

“We’ll just quietly watch from the sidelines and trust banks to behave — mostly.”

However, the drama isn’t quite over. Caitlin Long, a notable crypto custodian and advocate, points out the Fed didn’t yank one particularly grumpy anti-crypto directive voted on last year.

She suggests it’s not quite party time until the upcoming stablecoin law scissors that annoying rule into oblivion. 🎭

Fed crypto guidance—now with 50% more nuance.

Interestingly, the OCC was the early bird here, signaling crypto acceptance way back in March—proudly waving the flag for banks to mess around with stablecoins.

And the FDIC, clearly not wanting to miss out, launched an investigation into the infamous “crypto de-banking” saga from the Biden era, probably to figure out who stole the cookies from the crypto jar.

Throwback to the Trump years, when crypto enjoyed a breather from regulations, which felt a bit like letting a raccoon run loose at a picnic—exciting, chaotic, and slightly terrifying.

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2025-04-25 22:24