Which rules did the Fed rescind?

TLDR

The Federal Reserve rescinded its January 2023 policy statement that constrained uninsured state member banks innovative activities (including crypto) and, with the OCC and FDIC, removed prior approval requirements for banks to engage in crypto?asset and dollar?token activities, per recent updates (policy withdrawal, joint change).

1. The 2023 same activity, same risks, same regulation guidance was withdrawn, easing constraints on uninsured state member banks crypto services (summary).
2. Prior supervisory approval for bank crypto and dollar?token activities was rescinded, shifting oversight toward principles?based supervision (update).

Deep Dive

1. 2023 Policy Statement Withdrawn

The Fed ended its January 2023 guidance that applied insured?bank limits to uninsured state member banks, which had sharply curtailed crypto?related activities.

• The rescinded policy enforced same activity, same risks, same regulation, effectively blocking uninsured state banks from services not permitted for national banks, including several crypto use cases (policy withdrawal).
• The reversal also renewed scrutiny of the Feds denial of Custodia Banks master account request, which had been intertwined with the now?withdrawn guidance (context).

2. Prior Approval Requirement Rescinded

In April, the Fed, OCC, and FDIC removed earlier restrictions that forced banks to seek supervisory approval before engaging in crypto?asset and dollar?token activities.

• The change signals a move from blanket restrictions to principles?based oversight focused on safety and soundness controls, AML/BSA compliance, and tailored supervision (joint change).
• Analysts expect expanded institutional custody and pilot programs as banks reassess crypto services under the updated framework (overview).

Conclusion

The Feds rollbacks replace blanket restrictions with tailored, risk?based supervision. This could broaden bank participation in crypto custody and payments while keeping emphasis on safety, soundness, and compliance. For crypto markets, it suggests a more integrated banking posture, contingent on how supervisors apply the new frameworks in practice.