{"id":10477,"date":"2025-01-30T12:16:32","date_gmt":"2025-01-30T12:16:32","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=10477"},"modified":"2025-01-30T12:16:32","modified_gmt":"2025-01-30T12:16:32","slug":"crypto-banking-gets-green-light-from-fed-chair-jerome-powell","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=10477","title":{"rendered":"Crypto Banking Gets Green Light From Fed Chair Jerome Powell"},"content":{"rendered":"
\n

Federal Reserve Chair Jerome Powell delivered remarks yesterday suggesting that US banks can freely engage with crypto clients\u2014provided they understand and manage the inherent risks. Powell\u2019s comments came during the Federal Open Market Committee (FOMC) press conference, where he addressed queries about the Fed\u2019s stance on crypto banking.<\/p>\n

\u201cBanks are perfectly able to serve crypto customers as long as they understand and can manage the risks,\u201d Powell said<\/a>. \u201cWe\u2019re not against innovation, and we certainly don\u2019t want to take actions that would cause banks to terminate customers who are perfectly legal just because excess risk aversion may be related to regulation and supervision.\u201d<\/p>\n

Positive Reactions From Crypto Industry<\/h2>\n

Within hours, key figures in the community offered widespread praise for Powell\u2019s statement, interpreting it as a green light for banks that have been hesitant to embrace crypto services. Nic Carter, a partner at Castle Island Ventures and co-founder of blockchain data aggregator Coinmetrics.io, commented via X, \u201cImmense tonal shift. OCP2.0 over. this is particularly notable because my understanding is the Fed specifically was the nexus of OCP2.0.\u201d<\/p>\n

This sentiment was echoed by Hunter Horsley, CEO of Bitwise Asset Management, who tweeted<\/a>, \u201cBanks will be a major catalyst for crypto in 2025. Mainstream era beginning.\u201d Meanwhile, David Lawant, head of research at FalconX, remarked<\/a>, \u201cMassive wave incoming over next 6-18 months. Most aren\u2019t aware of the scale of it.\u201d<\/p>\n

Joe Consorti, head of growth at They, underscored the potential breadth of bank offerings: \u201cBanks can custody bitcoin on behalf of clients, create structured bitcoin financial products, and allow customers to buy bitcoin. Even Powell isn\u2019t badmouthing it anymore. Vibe shift.\u201d Bitcoin analyst Dylan LeClair also signaled the convergence of regulatory and market forces, stating, \u201cFASB + repeal of SAB 121 + In-Kind redemptions for ETFs. Banks are here.\u201d<\/p>\n

Powell\u2019s comments arrive at a moment when several regulatory and accounting changes are poised to reshape how banks handle digital assets. In August 2024, the Financial Accounting Standards Board (FASB)<\/a> introduced a standardized framework for accounting cryptocurrencies on company balance sheets. This was a landmark step, as it establishes clarity on reporting practices\u2014a crucial component for banks considering offering crypto services.<\/p>\n

The Securities and Exchange Commission (SEC) had previously imposed Staff Accounting Bulletin (SAB) 121<\/a> in March 2022, requiring financial firms to record customer-held cryptocurrencies as liabilities on their balance sheets. On January 23, 2025, the SEC repealed this rule through SAB 122. This move simplifies the custody process for digital assets, removing a substantial reporting burden and paving the way for more financial institutions to engage in crypto.<\/p>\n

Moreover, in-kind redemptions<\/a> for exchange-traded funds (ETFs), especially Bitcoin ETFs, are set to become a reality under the Trump administration. Instead of using cash, this mechanism allows ETF shares to be exchanged for the underlying assets\u2014aligning smoothly with Bitcoin\u2019s decentralized nature and offering potential tax benefits. BlackRock recently applied for a rule change at the SEC for its spot Bitcoin ETF.<\/p>\n

Taken together, these regulatory evolutions\u2014coupled with Powell\u2019s supportive tone\u2014signal a turning point for banks considering entry into crypto markets. Industry observers suggest that, with obstacles like SAB 121 removed and transparent FASB rules in place, US banks could become leading participants in the next wave of crypto adoption.<\/p>\n

At press time, the total crypto market cap stood at $3.49 trillion.<\/p>\n

\"Total<\/div>\n","protected":false},"excerpt":{"rendered":"

Federal Reserve Chair Jerome Powell delivered remarks yesterday suggesting that US banks can freely engage with crypto clients\u2014provided they understand and manage the inherent risks. Powell\u2019s comments came during the Federal Open Market Committee (FOMC) press conference, where he addressed queries about the Fed\u2019s stance on crypto banking. \u201cBanks are perfectly able to serve crypto […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-10477","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/10477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10477"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/10477\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}