US Fed pulls guidance blocking its banks from engaging with crypto

The US Federal Reserve has withdrawn its 2023 guidance that restricted Fed-supervised banks from engaging with cryptocurrencies, citing outdated policies and evolving financial systems. This move allows both insured and uninsured banks to pursue innovative activities like crypto services, provided risk management expectations are met. Fed Vice Chair Michelle Bowman supports the change, while Governor Michael Barr dissents, warning of regulatory arbitrage risks. Caitlin Long of Custodia Bank praised the decision, highlighting its impact on her institution's master account application.