In April 2025, Federal Reserve Chair Jerome Powell delivered a pivotal message on cryptocurrency regulation, indicating a clear shift in the U.S. financial landscape. During a speech at the Chicago Economic Club, Powell acknowledged that current banking regulations on digital assets “have room for relaxation” and emphasized the urgent need for a comprehensive stablecoin regulatory framework. This marked a turning point: from skepticism to structured support.
Powell’s remarks reflect a broader evolution in U.S. financial policy. The Office of the Comptroller of the Currency (OCC) has already taken concrete steps, lifting restrictive guidance from 2021 and permitting national banks to offer crypto custody, stablecoin reserve holdings, and blockchain node participation. These changes signal that digital assets are increasingly recognized as legitimate components of the modern financial system.
Regulatory Winds Shift: Banks Embrace Crypto Services
For years, U.S. banks avoided crypto-related services, often labeled as part of the so-called “Operation Choke Point 2.0.” But under Acting Comptroller Michael Hsu’s leadership, the OCC has reversed course.
On March 7, 2025, the OCC issued new interpretive letters allowing national banks to engage in key digital asset activities without prior approval:
- Crypto custody: Secure storage and management of private keys
- Stablecoin reserves: Holding 1:1 USD-backed stablecoin reserves
- Blockchain node operation: Participating in decentralized networks to validate transactions
This move effectively treats digital asset services as an extension of traditional banking functions. By repealing the restrictive Interpretive Letter #1179 from 2021, the OCC has removed significant barriers to institutional adoption.
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“Digital assets should and must be part of the American economy,” stated Acting Comptroller Hsu. “Our goal is to foster innovation while ensuring safety, soundness, and fairness in the federal banking system.”
Stablecoin Regulation Gains Momentum
Stablecoins have emerged as a focal point in U.S. crypto policy. Powell affirmed their growing relevance, noting: “Cryptocurrencies are becoming mainstream. Establishing a legal framework for stablecoins is a sound idea.” He praised ongoing legislative efforts, aligning with the Trump administration’s push for faster enactment.
Two major bills are advancing through Congress:
- House: The STABLE Act (Stablecoin Transparency, Accountability, and Base Liquidity Efficiency), passed by the House Financial Services Committee on April 3, defines stablecoins as payment instruments and bans interest-bearing models.
- Senate: The GENIUS Act (Global Emerging Networks Innovation and US Leadership), approved 18–6 by the Senate Banking Committee on March 13, mandates full 1:1 reserves and AML compliance for issuers.
Both bills aim to create “common-sense rules” that protect consumers while reinforcing the dollar’s global dominance. While differences remain—particularly around algorithmic stablecoins and state vs. federal oversight—industry experts anticipate a merged STABLE GENIUS Act by summer 2025.
Treasury Secretary Scott Besent reinforced this trajectory at the American Bankers Association conference, stating the administration is “evaluating regulatory barriers to blockchain and next-generation payment systems” with an eye toward unlocking capital market potential.
Key Core Keywords:
- Cryptocurrency regulation
- Stablecoin legislation
- Federal Reserve crypto policy
- OCC banking guidelines
- Blockchain financial integration
- Digital asset innovation
- Bitcoin market resilience
- Crypto macroeconomic impact
Political Crosscurrents: WLFI and Conflict Concerns
Despite bipartisan momentum, political scrutiny persists. Five Democratic senators raised alarms over potential conflicts involving World Liberty Financial (WLFI), a DeFi project backed by former President Trump, who holds a 60% stake. WLFI launched its USD1 stablecoin on BNB Chain and Ethereum in March 2025—just as Congress debated the GENIUS Act.
Critics argue that Trump’s executive actions may have weakened regulatory independence, creating risks for financial stability. The timing of USD1’s release—amid legislative review—has fueled concerns about undue influence on the rulemaking process.
Still, proponents maintain that clear regulation will ultimately benefit all market participants by reducing uncertainty and encouraging合规 innovation.
Macro Risks: How Tariffs Impact Crypto Markets
Beyond regulation, macroeconomic forces are reshaping crypto dynamics. Powell warned that recent tariff policies “may have larger-than-expected effects,” potentially driving inflation and slowing growth.
While cryptocurrencies were designed to operate independently of government control, they’re not immune to macro shocks:
- Mining costs: Tariffs on semiconductor chips and mining hardware could raise PoW crypto production costs, especially in regions reliant on Chinese-made ASICs.
- Market correlation: After the April 2 tariff announcement, Bitcoin dropped only 10%—far less than the S&P 500’s implied 36% decline—highlighting its diversification value.
- Currency substitution: In economies facing currency devaluation (e.g., Argentina, Turkey), citizens often turn to Bitcoin or stablecoins as hedges.
- Interest rate pressure: Higher inflation may prompt tighter monetary policy, reducing risk appetite for speculative assets like altcoins.
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Gary Gensler, former SEC Chair, echoed these complexities during a CNBC appearance. While acknowledging Bitcoin’s staying power—“7 billion people are interested”—he cautioned that “99% of crypto trading is driven by emotion.” He predicted most meme coins and speculative tokens would fade over time.
The Road Ahead: Innovation Amid Uncertainty
The U.S. is transitioning from crypto restriction to regulated integration. With the OCC paving the way for bank participation, Congress advancing stablecoin bills, and regulators acknowledging innovation potential, the foundation for mainstream adoption is being laid.
Yet challenges remain:
- The Fed and FDIC have not yet aligned with OCC’s stance.
- Tariff-driven inflation could squeeze mining margins and dampen investor sentiment.
- Political controversies may delay or distort legislation.
Still, major financial players are preparing for change. Brian Moynihan, CEO of Bank of America, confirmed plans to issue a proprietary stablecoin once regulations are finalized.
Frequently Asked Questions (FAQ)
Q: What did Powell say about cryptocurrency regulation?
A: Powell stated that current banking rules on crypto “have room for relaxation” and stressed the importance of establishing a clear stablecoin regulatory framework.
Q: Can U.S. banks now offer crypto services?
A: Yes. The OCC now permits national banks to provide crypto custody, hold stablecoin reserves, and run blockchain nodes without special approval.
Q: What are the main stablecoin bills in Congress?
A: The STABLE Act (House) and GENIUS Act (Senate) both aim to regulate USD-backed stablecoins with full reserves and consumer protections.
Q: How do tariffs affect Bitcoin mining?
A: Tariffs on imported chips and hardware can increase mining costs, especially for operations using ASICs made in China, potentially shifting mining geography.
Q: Is Bitcoin considered a safe-haven asset?
A: During market stress, Bitcoin has shown relative resilience. While not immune to sell-offs, its low correlation with traditional markets enhances portfolio diversification.
Q: Will most cryptocurrencies survive long-term?
A: According to Gary Gensler, only a few—like Bitcoin—may endure. Most tokens driven by hype or emotion are likely to lose relevance over time.
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As the U.S. builds a coherent digital asset strategy, one thing is clear: the era of crypto exclusion is ending. The path forward will balance innovation with oversight—but the door to institutional participation has now opened.