US Crypto Banking Restrictions Lifted in 2025: What the New Rules Mean
Oct, 17 2025
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On April 24, 2025, the Federal Reserve Board announced a landmark withdrawal of restrictive crypto-asset guidance for banking organizations, effectively ending the era of heavy‐handed crypto banking restrictions in the United States. This move, echoed by the OCC and the FDIC, reshapes how traditional banks can interact with digital assets and opens the door for a new wave of crypto services offered through mainstream financial institutions.
What Exactly Was Rescinded?
SR 22-6 is a supervisory letter issued by the Federal Reserve in 2022 that forced state member banks to give advance notice before any crypto‑asset activity. It created a reporting bottleneck that many banks avoided altogether. At the same time, SR 23-8 introduced a supervisory non‑objection process, meaning banks had to secure formal approval before engaging in dollar‑denominated token activities.
Both letters have now been officially rescinded. The Federal Reserve says it will monitor crypto activities through its regular supervisory channels, removing the special notification and approval steps that previously stalled bank‑led crypto initiatives.
How the OCC Shifted Its Stance
The Office of the Comptroller of the Currency (OCC) led the first wave of change on March 7, 2025 with Interpretive Letter 1183, which nullified the earlier Interpretive Letter 1179 (Nov2021). Letter 1183 re‑affirms that national banks and federal savings associations can provide crypto‑custody services, hold certain stablecoins, and participate in independent node verification networks without needing a supervisory non‑objection.
According to the OCC, “the supervisory non‑objection process is no longer necessary” because staff expertise on crypto‑asset activities has grown substantially.
FDIC’s Parallel Move
The FDIC completed the regulatory trio on March 28, 2025 by rescinding Financial Institution Letter FIL‑16‑2022. That letter had forced FDIC‑supervised institutions to seek prior approval for any crypto‑related operation.
The new FDIC guidance now permits permissible crypto activities-such as custodial services and stablecoin handling-provided banks manage risk, comply with consumer‑protection rules, and uphold anti‑money‑laundering (AML) standards.
Timeline of the Deregulatory Wave
| Date | Agency | Action | Impact on Banks |
|---|---|---|---|
| Mar72025 | OCC | Issued Interpretive Letter 1183 | Removed supervisory non‑objection for custody, stablecoins, node participation |
| Mar282025 | FDIC | Rescinded FIL‑16‑2022 | Eliminated prior‑approval requirement for permissible crypto activities |
| Apr242025 | Federal Reserve | Reversed SR22‑6 and SR23‑8 | Ended advance‑notice and formal‑approval mandates for most crypto‑asset work |
What This Means for Traditional Banks
With the procedural hurdles removed, banks can now explore a broader suite of crypto services. Typical offerings now include:
- Custodial wallets for retail customers
- Stablecoin issuance and reserve management
- Participation in independent node verification networks (e.g., Bitcoin, Ethereum)
Because the regulators will still enforce existing safety‑and‑soundness standards, banks must embed robust risk‑management frameworks, AML controls, and consumer‑protection policies into any new crypto product.
Remaining Gaps and Future Guidance
Legal analysts note that the 2025 overhaul stops short of addressing several gray areas. For example, the guidance does not yet clarify whether banks can hold non‑stablecoin cryptocurrencies on their balance sheets or extend crypto‑asset‑backed loans. The three agencies have pledged to work with the President’s Working Group on Digital Asset Markets to fill those gaps, suggesting that further policy tweaks could arrive later in 2025 or early 2026.
Industry Reaction and Market Outlook
Market observers, from law firms like Jones Day to fintech blogs, have praised the coordinated shift as a “permissive stance on cryptocurrency.” The removal of the notification and approval steps cuts compliance costs dramatically, freeing resources for product development.
Early adopters-such as a handful of regional banks in the Midwest-have already announced pilot programs for crypto‑custody services. Analysts project that within the next two years, at least 30% of U.S. banks could be offering some form of digital‑asset service, intensifying competition with specialized crypto‑focused fintech firms.
Practical Checklist for Banks Moving Forward
To capitalize on the new environment, banks should run through this short checklist:
- Update internal policies to reflect the removal of SR22‑6, SR23‑8, and FIL‑16‑2022.
- Conduct a risk‑assessment focused on crypto‑custody, stablecoin reserve management, and node participation.
- Align AML/KYC procedures with FinCEN’s crypto guidance.
- Train compliance and audit teams on the revised supervisory expectations.
- Engage with legal counsel to ensure any pilot remains within the “permissible crypto‑related activities” definition.
Key Takeaways
- The Federal Reserve, OCC, and FDIC have jointly removed advance‑notice and supervisory‑non‑objection requirements for most crypto activities.
- National banks can now offer custody, stablecoin, and node‑verification services without special approvals.
- FDIC‑supervised institutions enjoy the same freedom, provided they manage risk and meet AML rules.
- The regulatory shift reduces compliance costs and is likely to spur a wave of bank‑driven crypto products.
- Unresolved issues-like balance‑sheet holdings of non‑stablecoin tokens-could see guidance later in 2025.
Frequently Asked Questions
Do banks now need any approval to hold stablecoins?
No. After the OCC’s Interpretive Letter 1183 and the FDIC’s rescission of FIL‑16‑2022, banks may hold stablecoins as part of a custodial service without a separate supervisory non‑objection, as long as they meet risk‑management and AML standards.
What about Bitcoin or Ethereum custody?
Banks can participate in independent node verification networks for Bitcoin, Ethereum and similar blockchains. The guidance treats this activity as permissible crypto‑related work, again subject to ordinary supervisory oversight.
Will the new rules affect consumer protection?
Consumer‑protection rules remain unchanged. Banks must still comply with existing disclosure, fee‑transparency, and fraud‑prevention requirements when offering crypto services.
Are there any immediate compliance steps?
First, update internal policy manuals to remove references to SR22‑6, SR23‑8, and FIL‑16‑2022. Then run a fresh risk‑assessment focused on crypto‑custody, stablecoins, and node participation, and adjust AML/KYC programs accordingly.
Will more guidance be forthcoming?
Yes. The three agencies said they will continue to work with the President’s Working Group on Digital Asset Markets to address remaining uncertainties, such as banks holding non‑stablecoin cryptocurrencies or offering crypto‑backed loans.
Deborah de Beurs
October 17, 2025 AT 09:38Listen up, the regulators finally stopped playing puppet master – this is a massive win for anyone tired of bureaucratic shackles. The whole crypto‑banking saga has been a circus and now the tent is finally taken down.
The new rules are a slap in the face to the over‑cautious regulators who pretended they were protecting us.
Vinoth Raja
October 22, 2025 AT 21:14From a systems‑theoretic perspective, the rescindment of SR‑22‑6 and SR‑23‑8 essentially reconfigures the compliance topology, allowing banks to engage in distributed ledger interfacing without the erstwhile meta‑governance overhead. This shift reduces the transaction‑cost friction inherent in the prior supervisory non‑objection paradigm.
Chris Morano
October 28, 2025 AT 08:49It's great to see the regulators finally easing up. Banks can now explore crypto services while still keeping a watchful eye on risk and AML. This balance should help the industry grow responsibly.
Deepak Kumar
November 2, 2025 AT 20:25Hey folks, this is the perfect moment for banks to roll out pilot crypto‑custody programs. Start small, build solid risk frameworks, and educate your teams – the momentum is on your side!
Laura Hoch
November 8, 2025 AT 08:01While the deregulatory wave feels like a breath of fresh air, we must not forget the philosophical underpinnings of trust and responsibility that banks hold. Aggressively pursue innovation, but never at the expense of consumer safeguards.
Cecilia Cecilia
November 13, 2025 AT 19:37Banks must now revise their compliance manuals to reflect the rescinded guidance.
lida norman
November 19, 2025 AT 07:13Wow, finally some good news! 🎉 The crypto‑banking lock‑down is over, and it feels like a blockbuster ending! 🌟
Shivani Chauhan
November 24, 2025 AT 18:48The recent regulatory changes open up a multitude of opportunities for banks to diversify their product suites. It will be essential to integrate robust KYC and AML procedures to maintain compliance while innovating.
Hailey M.
November 30, 2025 AT 06:24Great, the regulators finally stopped being the buzzkill. 🙄 Now we can actually do something with crypto without jumping through endless hoops. 🎈