Story perspectives

Fed Lifts Crypto Restrictions for State Banks Amid Caution

12/18/2025

Summary

Story summary

On December 17, 2025, the Federal Reserve withdrew the 2023 policy restricting uninsured state-chartered banks, allowing crypto activity.
The change aims to enable responsible innovation and reflects a broader view of the financial system.
Vice Chair Michelle Bowman stressed banks must stay safe while adopting new technologies.
Governor Michael Barr dissented, warning the policy could invite regulatory arbitrage.

History

Historical Context

The Depository Institutions Deregulation and Monetary Control Act of 1980 significantly altered U.S. banking regulations, allowing state-chartered banks more operational freedom and leading to over 14,000 banks by the late 1990s. The recent Federal Reserve decision to ease restrictions on uninsured state-chartered banks reflects this historical trend, raising concerns about regulatory arbitrage and the balance between innovation and financial stability.

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Story summary

On December 17, 2025, the Federal Reserve withdrew the 2023 policy restricting uninsured state-chartered banks, allowing crypto activity.
The change aims to enable responsible innovation and reflects a broader view of the financial system.
Vice Chair Michelle Bowman stressed banks must stay safe while adopting new technologies.
Governor Michael Barr dissented, warning the policy could invite regulatory arbitrage.

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