In a landmark policy clarification, Federal Reserve Chair Jerome Powell has confirmed that U.S. banks are now permitted to offer services to Bitcoin and the broader cryptocurrency sector so long as they adhere to proper risk management and consumer protection protocols.

Speaking before Congress on June 24, 2025, Powell emphasized that the Fed does not oppose crypto-related activities by banks. Instead, it expects institutions to follow established regulatory guidelines, including anti-money laundering (AML), know-your-customer (KYC), and data privacy standards.

“Banks are free to engage with digital currency companies if they manage risks properly and protect consumers,” Powell stated, signaling a shift away from vague regulatory barriers like “reputational risk” that previously hindered crypto-banking relationships.

This announcement marks a significant turning point for the crypto industry, which has long struggled with limited access to traditional banking services. With this green light, banks can now explore offerings such as crypto custody, payments, and settlements—services that were once considered too risky or unclear under federal guidance.

While the Fed’s stance opens new doors, Powell also made it clear that this is not a free-for-all. Banks must implement strong internal controls, ensure compliance with existing laws, and maintain transparency in their crypto dealings. The message is clear: innovation is welcome, but guardrails remain essential.

This policy shift is expected to accelerate the integration of digital assets into the mainstream financial system, potentially boosting adoption and fostering more robust partnerships between fintechs and traditional banks.

Final Word

Fed Chair Powell’s announcement officially removes a key barrier that had held crypto-first companies on the fringes reputational risk. It allows banks to consciously decide whether to serve cryptocurrency businesses, while still upholding regulatory protections.

If you’ve been waiting for proof that the Fed supports crypto innovation within the banking system here it is. Banks can and should offer services to crypto firms responsibly, and that matters for adoption, stability, and the future of digital finance.