The Fed turns a page in Crypto regulation. By announcing two major directives imposed on banks since 2022 and 2023, the American institution has resumed the cards of the supervision of cryptos. Its new line, embodied by the letter SR 25-4, abandons the requirement of prior reporting for the benefit of autonomous risk management. This is a discreet, but strategic repositioning, in a context where regulatory pressure intensifies and where the fracture lines between financial innovation and institutional control are becoming more and more visible.
In short
- The American federal reserve cancels two 2022 and 2023 guidelines which strictly framed the crypto activities of the banks.
- A new surveillance letter, the SR 25-4, replaces these rules by focusing on autonomous risk management by financial institutions.
- The notification obligations prior to the Fed are deleted, a sign of an apparent relaxation of the regulatory framework.
- This revision marks a break in the way Fed oversees the initiatives related to cryptos.
A change of regulatory course
The American Federal Reserve officially canceled this April 24, 2025 Surveillance Letters SR 22-6 and SR 23-8, two key documents which so far supervised the way in which banks were to manage their activities related to cryptos.
These directives require financial institutions to notify the Fed any involvement, present or future, in activities related to cryptos. Indeed, this obligation of prior notification is now lifted.
The new orientation is now embodied by The SR 25-4 monitoring letter. The latter:
- Replaces the previous directives SR 22-6 and SR 23-8;
- Deletes the obligation to notify in advance any Crypto activity;
- Strengthens internal risk management requirements;
- Specifies that banks must operate “Safe and healthy” ;
- Requires compliance with the laws and regulations in force.
This change marks a turning point in the supervision of cryptos by the Fed, which abandons a logic of preliminary validation for an approach centered on internal governance and the empowerment of financial institutions.
A new risk reading
Beyond the abolition of prior notification requirements, the SR 25-4 letter introduces a strategic reorientation in risk management. The privileged approach is no longer based on a centralized supervision of each Crypto project by the Fed, but on an increased delegation to internal banks control systems.
The latter are now responsible for demonstrating that they include the risks associated with cryptos and that they have adequate means to mitigate them.
In this new framework, the Fed does not engage in a systematic prior monitoring. Instead, she specifies that banks must carry out a continuous self-assessment, taking into account “Operational, legal, liquidity and reputation risks”specific to these technologies. This refocusing on internal governance implies a significant change in attitude in the relationship between financial institutions and their supervisor.
This regulatory realignment challenges the way in which banks will adapt their practices and on the stability of the medium -term framework. If this approach is perceived by some as a form of softening, it also transfers more responsibilities to financial institutions. In a still moving legal environment and where the initiatives of the Congress on Cryptos are struggling to move forward, this evolution could mark a step towards a more technical and less political supervision, but also more demanding in terms of autonomous compliance. The next few months will judge whether this new architecture will achieve the balance between innovation and security that American regulators are looking for.
Maximize your Cointribne experience with our 'Read to Earn' program! For each article you read, earn points and access exclusive rewards. Sign up now and start accumulating advantages.
