Federal Reserve Chair Jerome Powell has suggested that the central bank may ease its stance on crypto-related banking regulations, citing a more mature and mainstream crypto landscape.
Speaking at the Economic Club of Chicago on Wednesday, Powell acknowledged that previous guidance issued by the Fed and other regulators took a highly cautious tone, shaped by past incidents of fraud and systemic failures in the crypto space. However, he said the industry’s progress warrants a fresh approach.
“We took a pretty conservative, other bank regulators took an even more conservative perspective on the guidance and rules we imposed on banks,” Powell noted.
“I think there will be some loosening of that.”
Powell emphasized that any future adjustments would be carefully balanced. The goal, he said, is to enable innovation without compromising consumer protection or the safety of the banking system.
“We’ll try to do it in a way that preserves safety and soundness, but that permits and fosters appropriate innovation, but does so in a way that again doesn’t put consumers at risk in ways they don’t understand or make banks less safe and sound,” he added.
The comments come amid growing expectations that U.S. regulators—under mounting pressure from the White House and industry leaders—will begin updating outdated restrictions on how financial institutions interact with digital assets.
Trump-Era Momentum Reshapes Crypto Banking Policy
Since President Donald Trump returned to office in January, federal banking agencies have begun a rapid realignment of their stance on digital assets—laying the groundwork for deeper institutional engagement with crypto.
Last month, the Federal Deposit Insurance Corporation (FDIC) said it would repeal outdated guidance and introduce new instructions clarifying that supervised banks can engage in permitted crypto-related activities without prior approval. Similarly, the Office of the Comptroller of the Currency (OCC) reaffirmed that crypto operations are allowed within the federal banking system.
These moves mark a clear departure from the previously restrictive posture that had frustrated many industry players. They also follow comments by Federal Reserve Chair Jerome Powell, who said regulators are working to “foster appropriate innovation” without compromising safety and soundness in the financial system.
Legislators, meanwhile, are moving quickly to pass comprehensive rules around stablecoins. Both chambers of Congress have advanced bills from committee, and Trump has publicly stated he wants a final version on his desk as soon as possible.
Powell, speaking on Wednesday, expressed support for those efforts:
“Stablecoins are a digital product that could actually have fairly wide appeal,” he said.
“And they should contain consumer protections of the typical sorts and transparency, and that’s what the Senate and the House are working on.”
This shift, accelerated under Trump’s pro-crypto agenda, signals that regulatory clarity—especially for banks—may finally be within reach.
Quick Facts
- Fed Chair Powell signaled a potential relaxation of crypto banking rules.
- The move aims to balance innovation with systemic stability.
- Stablecoins are a priority, with Congress drafting legal frameworks.
- Regulatory clarity for financial institutions appears increasingly likely.
