Recently, a statement from Fed Chairman Powell has caused quite a stir in the encryption circle. The core message is very clear: federal regulators will no longer set obstacles for banks to engage in encryption businesses as long as operations are legal and compliant. How significant is this news? To be honest, its actual implications far exceed the so-called "Favourable Information" of the past year — it effectively breaks down the invisible wall between the TradFi system and the encryption ecosystem.

Let’s break it down and see what this shift specifically changes. The first level is that the shackles on banks have truly been released. For a long time, banks have been both interested in and apprehensive about crypto assets. Now that regulations clearly support this, banks can reasonably engage in three major businesses: providing digital asset custody for clients, conducting normal trading cooperation with licensed crypto institutions, and developing new products based on encryption technology. This way, those partnerships that once hid in the shadows can now come into the sunlight without worrying about sudden policy changes leading to interruptions in cooperation.

The second aspect involves the liquidity dilemma of the encryption ecosystem itself. Many people think that the bottleneck in past development comes from regulatory prohibitions, but that is not the case—the real issue lies in the invisible behind-the-scenes pressures. Project parties are unable to smoothly open bank accounts, exchanges are cut off from payment channels, and there are significant barriers to capital inflow and outflow. It's like building a big wall around the entire ecosystem, obstructing the flow of funds. Now that this wall has been breached, the entry of traditional capital and the movement of crypto assets will become smoother. The impact on market liquidity and institutional participation is self-evident.