US regulators to make it easier for banks to deal with cryptocurrencies

On Thursday, major US supervisors decided to lift several restrictions on crypto banking activities. These included the Fed, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). 

Previously, American financial institutions were mandated to seek pre-approval for cryptocurrency and stablecoin transactions and were warned of the risks associated with volatility, legal uncertainty, and low liquidity. Moreover, two statements from 2023 that urged heightened scrutiny of cryptocurrency companies were rescinded.

This initiative is in line with US President Donald Trump's policy to strengthen the digital industry. The Fed said regulators will explore how the revised rules can encourage innovation.

In March, the OCC eased restrictions on banks that want to be part of the cryptocurrency sector.

Such changes are likely to cheer up more financial institutions to engage with blockchain-based assets, potentially accelerating the growth of the digital currency market in the United States, Reuters reports.