On April 24, the Federal Reserve overturned guidelines that previously blocked Wall Street adoption of Bitcoin and crypto. However, the Federal Deposit Insurance Corporation (FDIC) and the Secretary of Currency (OCC) retracted its own statement on the same day, informing banks that they would view the risks related to crypto.
Previously, the Fed repeatedly warned banks to be aware of volatility related to crypto, legal gray areas, and liquidity risks.
State member banks – banks regulated by institutions – can provide cryptographic services without prior approval.
“The move reflects the increasingly pro-cryptic attitude of the Trump administration,” analysts at Tagus Capital said, including a decline in regulations enforcement and the appointment of code-friendly SEC chairman Paul Atkins.
Among them, the business figure cheered the Fed in Michael Saylor, the founder of MicroStrategy, as a signal to banks move towards Bitcoin.
Meanwhile, the Crypto ETF had its best day since January, accumulating $2.6 billion this week.
However, the Fed did not extend the privileges of the master account to banks from cryptocurrency origins such as Custodia and Kraken Financial.
Market strategist Joel Kruger said the Fed’s move, along with political uncertainty and fear of recession, could make central banks even more aggressive in their cut rates. That possibility could have caused a round of US dollar spills, allowing him to send even more dollars to digital assets.