Financial entity, the Federal Reserve, aligns with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) in abandoning their earlier crypto-critical policies.
The U.S. federal regulators, led by the Federal Reserve, are shifting towards a more integrated and innovation-friendly approach to cryptocurrency and stablecoin regulation. This change marks a departure from the fragmented and inconsistent standards of the past, moving towards a clearer framework that supports responsible innovation while maintaining prudential safeguards.
Recently, the Federal Reserve shut down its dedicated novel activities supervision program for crypto and fintech activities, including stablecoins, indicating a move to integrate crypto oversight into the standard supervisory process rather than a separate program. Michelle Bowman, the Fed’s vice chair for supervision, is a leading voice in crafting regulations under the new stablecoin law, the GENIUS Act.
The GENIUS Act, recently enacted, mandates federal regulators (including the Fed, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC)) to establish a comprehensive regulatory regime for stablecoins covering capital requirements, liquidity risk, and reserve assets. The effective date of the GENIUS Act regulations will be by January 18, 2027, or sooner if final rules are issued earlier. Regulators have one year from the act’s passage to issue rules.
The FDIC and OCC are expected to be key partners in this harmonized federal oversight regime. While specific details in these search results are limited, the broader federal regulatory environment aligns with the Fed’s approach of coordinated regulation and diminishing fragmented or overly cautious policies.
Sen. Lummis, a vocal advocate for digital assets, recently expressed skepticism about the Federal Reserve's cryptocurrency guidance withdrawals on social media site X. However, the focus of this regulatory shift is on removing barriers for banks to deal with crypto and stablecoins while ensuring financial stability and consumer protection.
This more engaged and coordinated approach to crypto regulation is a significant development for the crypto world, which previously viewed Biden-era financial regulators as unamenable to digital assets. The withdrawal of three pieces of Biden-era guidance related to banks' engagement in cryptocurrency, as well as the abandonment of legal cases against crypto firms under Trump 2.0, further underscores this shift.
In conclusion, U.S. federal regulators are moving towards unified, innovation-friendly regulation, especially centred on implementing the GENIUS Act for stablecoins. The FDIC and OCC are expected to be key partners in this harmonized federal oversight regime. The Fed maintains supervision of crypto activities embedded in regular banking supervision, supported by leadership that advocates clearer rules facilitating crypto finance adoption.
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