The Federal Reserve rescinds the 2023 policy statement, giving the green light for banks to participate in crypto innovation

According to Eleanor Terrett's disclosure, the Federal Reserve officially revoked its 2023 policy statement on Wednesday and issued a new policy to create conditions for regulated banks to participate in innovative financial activities. This policy change removed the previous restrictions that hindered uninsured banks from becoming members of the Federal Reserve and participating in cryptocurrency activities, which was the basis for the Federal Reserve's rejection of Custodia Bank's master account application.

Federal Reserve Vice Chair for Supervision Michelle W. Bowman stated, "New technologies provide efficiencies for banks and better products and services for customers. By creating pathways for responsible innovation in products and services, the Federal Reserve ensures that the banking industry can modernize, operate efficiently, and remain safe and sound."