Fed Chair Powell Hints at Softer Crypto Rules for Banks

Powell Opens the Door to Easing Crypto Rules

In a notable pivot, Federal Reserve Chairman Jerome Powell hinted at a "loosening" of crypto-related banking rules, signaling that U.S. regulators may soon ease their stance on digital assets in the financial sector. Speaking at The Economic Club of Chicago on Wednesday, Powell acknowledged that while the past was marked by "a wave of failures and fraud," the crypto environment has become increasingly mainstream.

"We took a pretty conservative — other bank regulators took an even more conservative perspective — on the guidance and rules we imposed on banks," Powell said. "I think there will be some loosening of that."

Balancing Innovation With Safety

Despite suggesting regulatory relaxation, Powell made it clear that any shift would come with safeguards. He stressed the need to foster innovation without putting consumers or the broader financial system at risk.

“We’ll try to do it in a way that preserves safety and soundness,” he said, “but that permits and fosters appropriate innovation.”

Powell’s remarks come at a time when U.S. regulators appear to be rethinking how banks engage with digital assets, especially as crypto gains momentum across both retail and institutional spaces.

Trump-Era Regulatory Shift Is Underway

Since President Donald Trump returned to office in January, federal agencies have started dialing back strict oversight of crypto activities in the banking sector. In March, the Federal Deposit Insurance Corporation (FDIC) announced plans to rescind outdated guidance that restricted crypto activity, allowing banks to engage in permissible crypto-related operations without prior approval.  Additionally, the Office of the Comptroller of the Currency (OCC) has clarified that crypto activities are allowed in the federal banking system, offering further support for industry expansion.

Stablecoins in the Spotlight

Powell also commented on stablecoins, describing them as a “digital product that could actually have fairly wide appeal” — provided they come with the proper consumer protections and transparency.

“That’s what the Senate and the House are working on,” Powell noted, referring to the bipartisan push to establish a national regulatory framework for stablecoins.

Legislation to regulate stablecoins is rapidly advancing through Congress. Both the House and Senate have passed bills out of committee, and President Trump has urged lawmakers to deliver a finished bill for his signature as soon as possible.

A New Chapter for U.S. Crypto-Banking

Powell’s statements are being viewed as a turning point for banks, which have long tread carefully around crypto due to regulatory uncertainty. The new direction suggests that Washington is preparing to give traditional finance a clearer, safer path into digital assets — a move that could expand access and accelerate adoption. If implemented, these reforms would align the U.S. with other crypto-forward nations that have already begun integrating digital assets into their mainstream financial ecosystems.