Recently, the Board of Governors of the Federal Reserve System announced the termination of its special regulatory program for the banking industry's Crypto Assets and fintech activities. This decision marks a significant shift in regulatory approach, bringing related regulatory work back into standard procedures.

The Federal Reserve stated that since the launch of the program, they have deepened their understanding of these emerging financial activities, including the associated risks and banking risk management practices. Therefore, they have decided to integrate the accumulated knowledge and regulatory experience into the regular regulatory framework and have withdrawn the relevant regulatory letters issued in 2023.

The introduction of this regulatory plan stems from the 2023 crisis in the U.S. banking sector, during which three banks closely related to the Crypto Assets industry collapsed one after another, triggering concerns among regulators about the systemic risks posed by innovative technologies. However, as time has passed and understanding of the Crypto Assets field has deepened, the regulatory attitude has begun to become more moderate.

It is worth noting that, despite the simplification of regulatory processes, the banking industry still needs to adhere to basic regulatory principles such as anti-money laundering and consumer protection when engaging in crypto-related activities. This adjustment may alleviate the long-standing criticism from the crypto industry regarding regulators "blocking" their connections with traditional banking.

Since the beginning of this year, the financial regulatory environment in the United States has shown a more open trend. The Federal Reserve withdrew its requirement in April for banks to obtain prior approval to engage in new crypto assets businesses. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have also taken similar measures, granting banks the authority to independently decide whether to engage in crypto assets businesses within the existing risk management framework.

In July, the three major regulatory agencies jointly issued guidance on banks providing Crypto Assets custody services, clarifying the definition and scope of custody business, while emphasizing that this does not constitute new regulatory requirements.

These policy adjustments reflect that regulatory agencies' attitudes towards Crypto Assets are evolving, providing greater space for the banking sector to participate in innovative financial activities while protecting financial stability. With the optimization of the regulatory environment, we may see a deeper integration of traditional finance and emerging finance, injecting new momentum into financial innovation.