FSOC Drops Digital Assets From U.S. Financial Risk List in Major Policy Shift

Source: ETHNews Original Title: FSOC Drops Digital Assets From U.S. Financial Risk List in Major Policy Shift Original Link: https://www.ethnews.com/fsoc-drops-digital-assets-from-u-s-financial-risk-list-in-major-policy-shift/ The Financial Stability Oversight Council (FSOC) has formally removed digital assets from its roster of potential systemic risks, marking one of the most notable policy reversals in the U.S. regulatory landscape.

The decision was included in the council’s annual report released on December 11, 2025, and reflects a broader pivot away from the precautionary stance that has shaped federal oversight of crypto in recent years.

A Move Toward Growth Over Precaution

Treasury Secretary Scott Bessent, in the opening letter of the report, emphasized that the council’s new mandate focuses on long-term economic growth rather than identifying every theoretical “vulnerability.” The 2025 annual report has been substantially shortened, with several layers of red tape removed in an effort to streamline risk assessments and narrow regulatory priorities.

This represents a significant departure from FSOC’s 2022 report, which warned that crypto-asset activities “could pose risks to the stability of the U.S. financial system.” At the time, regulators raised concerns around leverage, interconnections between traditional finance and crypto markets, and the lack of unified oversight.

Regulators Step Back From Broad Crypto Warnings

The latest report omits any explicit systemic risk concerns related to digital assets and instead highlights positive developments, including clearer regulatory structures and the withdrawal of previous blanket warnings about banks engaging with the crypto sector.

Regulators acknowledge, however, that U.S. dollar stablecoins still require monitoring, particularly around potential misuse in illicit finance. Even so, the language marks a substantial softening of tone compared to past years.

Policy Shift Aligns With Congressional Momentum

FSOC’s move comes as crypto-friendly legislation gains traction in Congress and industry-backed market-structure proposals advance. It also follows a wave of institutional adoption moments, including:

• JPMorgan’s tokenized commercial paper issuance on Solana
• Wrapped XRP’s expansion across Solana, Ethereum, Optimism, and HyperEVM
• Growing tokenization initiatives from banks and asset managers

These developments reinforce the perception that tokenized assets and blockchain infrastructure are becoming integrated into the broader financial system rather than remaining isolated or speculative.

A Clear Signal for the Future of U.S. Digital Asset Policy

By removing crypto from its systemic risk list, FSOC is signaling greater confidence in the market’s maturation and in the regulatory frameworks now taking shape. The shift suggests federal agencies are preparing for a future in which digital assets, tokenized instruments, and blockchain-based settlement rails play a routine role in U.S. financial markets.

The change positions 2026 as a potential inflection point, where oversight becomes more targeted, innovation receives fewer structural roadblocks, and digital assets are evaluated through the same risk lens as other emerging technologies rather than as an inherent threat.