The Federal Reserve reversed its 2023 policy restricting banks from engaging in cryptocurrency activities.

Odaily Planet Daily reports that the Federal Reserve on Wednesday withdrew a policy statement issued in 2023 that previously restricted state member banks under the supervision of the Federal Reserve from engaging in "innovative" activities beyond the scope of national bank licenses, including various cryptocurrency services. In its statement, the Federal Reserve said that as its understanding of innovative products and services continues to evolve, it is now replacing the restrictive policy with a more flexible one.

According to the updated policy statement in 2025, uninsured state member banks can now apply to the Federal Reserve Board of Governors on a case-by-case basis to engage in activities that insured banks are not permitted to do. Previously, the 2023 guidelines were a key reason why the Federal Reserve rejected Custodia Bank's application to obtain a Fed Master Account. Federal Reserve Governor Michael S. Barr disagreed, arguing that a level playing field should be maintained for banks with different licenses.