Loosening encryption regulations, The Federal Reserve (FED) and other institutions have revoked relevant guidelines for the banking industry.

The Federal Reserve announced on Thursday that it would withdraw its regulatory guidance on banks’ crypto assets and U.S. dollar token businesses, and simultaneously updated the relevant business expectation standards. The move aims to ensure that regulatory requirements keep pace with the evolution of risks and further support innovation in the banking system. According to the announcement, the Federal Reserve officially rescinded the regulatory letter issued in 2022, which previously required state member banks to make prior filings on proposed or existing cryptoasset businesses. After the revocation, the Fed will no longer require banks to meet their reporting obligations and will instead monitor activity through a regular regulatory process. Also repealed is the 2023 guidance document on the “regulatory no-objection” procedure for state member banks to participate in the U.S. dollar token business. In addition, the Federal Reserve, together with the Federal Deposit Insurance Corporation, decided to withdraw from two policy statements jointly issued by federal banking regulators in 2023 regarding banks’ cryptoasset business and risk exposure. The Office of the Comptroller of the Currency had previously withdrawn from the statement. The Fed said it will work with other regulators in the future to assess the need for a new guidance framework to support innovation, including in the cryptoasset business.