- Policy changes allow more bank participation in cryptocurrencies.
- Harnessing crypto market potential gets official backing.
- Institutions can now engage in custody and stablecoin activities.
The US Federal Reserve and SEC have realigned cryptocurrency regulations, announced in Philadelphia on November 12, 2025, allowing banks increased involvement in crypto activities.
This regulatory shift allows banks more freedom in cryptocurrency engagements, potentially increasing market activity and influencing Bitcoin allocations among institutional investors.
The US Federal Reserve and SEC have revised their cryptocurrency policies, affecting financial institutions significantly. Recent actions aim to enhance regulatory clarity in the sector while abolishing previous restrictions on banks’ crypto activities.
Governor Michael Barr opposed the recent policy change, arguing it reduced regulatory arbitrage risks. SEC Chair Paul Atkins introduced Project Crypto to align SEC’s stance, suggesting many tokens aren’t securities under existing laws.
The policy shift allows institutions, particularly banks, to pursue crypto operations like custody and stablecoin issuance. Experts note this could encourage broader adoption and investment from major financial players.
Financial implications include potential growth for BTC and stablecoins, with the market anticipating a rise in institutional interest. Recent policy rescindment coincides with projected rate cuts and significant treasury purchases starting in 2026.
Institutional investors are managing an estimated $179.5 billion in crypto ETFs. The GENIUS Act further legitimizes stablecoins. Regulatory changes might replicate impacts witnessed after the FTX crisis, where restrictions initially hindered banks’ crypto engagements.
Anticipated outcomes include increased market activity, potential regulatory challenges, and shifts in technology adoption. Historical precedents showcase similar scenarios leading to both opportunities and obstacles for crypto integration within traditional finance systems.
Reduces the risks of regulatory arbitrage and provides a level playing field. — Michael Barr, Fed Governor
