U.S. banking regulators have recently eased restrictions on banks' involvement with digital assets, signaling a potential shift in the regulatory landscape. This move allows banks to engage with crypto assets and related activities without seeking prior approval, provided they manage risks effectively and comply with existing regulations. The Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC) have rescinded their old cautionary guidance. This is a big deal. This move signals a significant shift in their approach. Institutions with a global presence must still navigate international standards set by the Basel Committee on Banking Supervision (BCBS).

U.S. Regulators Relax Stance on Crypto

They retracted prior guidance that had limited banks from working with cryptocurrency. The import of this decision is to provide banks with the increased latitude to innovate into and expand their presence in a digital asset ecosystem. Those withdrawn statements of regulatory intent served as a chilling deterrent. Instead, they sought to discourage banks from actively engaging in the crypto ecosystem.

The FDIC has recently released further guidance. Now, FDIC-supervised institutions can participate in allowable crypto-related activities without pre-approval from the FDIC. This guidance reiterates the need to manage associated risk and remain compliant within the regulatory framework. By adhering to these principles, banks can explore opportunities in the crypto market while safeguarding their operations and protecting consumers.

Specifically, on May 7, 2025 the OCC released Interpretive Letter 1184. This interpretive letter clarifies that national banks and federal savings associations may purchase and sell assets held in custody, but only at the customer’s direction. This clarification gives more backstop for banks that are interested in providing crypto services to their bank customer. First, the OCC falsely opens the door for banks to outsource their crypto-asset activities. As long as they are providing these services through strong risk management practices, we include custody and execution services to third parties.

International Standards and Global Implications

U.S. regulators are starting to roll back their years-long opposition to crypto. Global, systemically important institutions must still meet the high bar established by the Basel Committee on Banking Supervision (BCBS). The BCBS has made a wise choice in letting Basel standards apply to the prudential treatment of banks’ crypto-asset exposures. This amendment will go into effect by January 1, 2026. These standards will ensure that the most internationally active banks stay well-capitalized. This is especially true for banks that have assets on permissionless blockchains listed on their balance sheets.

Although these protections are welcome, it is important to remember that Basel standards are not legally binding and need to be adopted through national regulation. Due to the adoption process, including the potential for delays, amendments or even piecemeal adoption, this can lead to a confusing and patchwork regulatory environment. Others, like the U.S., just refuse to adopt Basel standards. Some focus just on the suburbs or low-risk areas, places with fewer people and structures that might be in danger.

The U.S. and they typical international approach seen through bodies like the BCBS diverge substantially in regulatory approach. That makes things difficult enough for global banks. These institutions must carefully navigate the varying requirements to ensure compliance across different jurisdictions. This complexity further illustrates why a holistic and multi-jurisdictional approach to crypto regulation is necessary on a global level.

Global Approaches to Crypto Regulation

The U.S. isn’t the only area that’s seen a shift in the regulatory stance towards crypto. This year, the Hong Kong Monetary Authority made a dramatic move. They encouraged the banks to provide essential banking services to regulated virtual asset service providers. This step further demonstrates Taylor’s and her administration’s overall pro-crypto stance and intent to drive innovation in the digital asset space.

Central banks in South Africa, Nigeria, and the United Arab Emirates have already moved. They released fact sheets to clarify how banks can responsibly mitigate risks to financial crime while still participating in the innovative crypto space. These guidelines point to an increased recognition that regulatory frameworks are needed. Their goal is to pursue a vision that focuses on the unique challenges and opportunities that crypto assets have to offer. Additionally, regulators in Singapore and Hong Kong have expressed interest in letting banks issue their own stablecoins. This has potentially opened the door for future bank-backed digital currencies.

The global landscape of crypto regulation is changing quickly, with jurisdictions around the world laying out different plans of attack. On one hand, you have countries that are welcoming crypto innovation with open arms. This diversity highlights the need for ongoing communication and discussion between regulators. Through cooperation, they can work together to provide a uniform and practical framework for crypto regulation across the globe.