The Federal Reserve’s landmark decision enables traditional banks to custody cryptocurrencies, marking a major step toward institutional crypto adoption and regulatory clarity.
The Federal Reserve and U.S. banking regulators have issued comprehensive guidelines authorizing banks to provide crypto custody services, including Bitcoin holdings, effective May 7, 2025. This policy shift ends years of regulatory uncertainty that kept traditional financial institutions from competing with specialized crypto custodians. The rules permit FDIC-supervised banks to manage digital assets, stablecoin reserves, and blockchain payment solutions under strict security protocols.
Banks must now implement robust risk management systems, including control of cryptographic keys and threat assessments for digital asset protection. The framework aims to build institutional trust, with analysts predicting increased crypto market participation from cautious investors who previously avoided the space due to regulatory concerns.
The guidance represents a strategic move to integrate cryptocurrencies into mainstream finance, potentially spurring new financial products and deeper collaboration between traditional banks and crypto firms. By establishing clear custody standards, regulators seek to enhance market security while creating opportunities for financial innovation across the banking sector.
CryptoFeedHub Note: This article is a rewritten summary based on external reporting. Original source: Coin World.