Wall Street Eyes Crypto Again as U.S. Policy Shift Fuels Momentum
US regulators are finally unwinding long-standing restrictions on digital assets. The latest moves by the Federal Reserve...
Quick overview
- US regulators are easing restrictions on digital assets, allowing banks and institutional investors to enter crypto markets more easily.
- The Federal Reserve has issued a new framework enabling banks to engage in crypto-related activities, enhancing their ability to offer services like digital asset custody.
- The SEC has provided guidance on crypto custody rules, requiring broker-dealers to ensure strong control over customer assets and security measures.
- While market sentiment remains cautious, the regulatory changes are expected to boost institutional participation and support gradual growth in the crypto sector.
US regulators are finally unwinding long-standing restrictions on digital assets. The latest moves by the Federal Reserve and the Securities and Exchange Commission are aimed at easing the regulatory hurdles that have been stalling banks and institutional investors from entering crypto markets. Prices may still be on shaky ground, but the policy shift has given the sector a more optimistic long-term outlook.
The Fed Opens Up Banking Access to Crypto
The Fed quietly withdrew its 2023 guidance and issued a new framework that allows supervised banks to pursue crypto-related activities. Both insured and uninsured member banks can do so under existing rules, which allows them play.
The Fed views crypto as a whole new level of technology that could really shake things up and make things more efficient and easier for customers. As Vice Chair Michelle W. Bowman put it, the goal is to give this tech a chance to flourish while still keeping the financial system stable.
When you can’t win in Congress, you take the fight to the press. Clear series of NYT articles ahead of potential market structure movement in Congress and now positioning the SEC as weak on crypto right before the innovation exemptions. The anti-crypto army is alive and well.
— Jason Brett (@RegulatoryJason) December 16, 2025
Banks are now in a much better position to start offering:
- crypto on and off ramps
- digital asset custody services
- tokenized deposits and assets
The Fed is on the same page as other agencies here – the FDIC has also decided to get rid of its approval requirements for crypto asset management, and the OCC has confirmed that banks can hold Bitcoin, ETH, SOL, and XRP for their blockchain operations.
SEC Gives Some Clarity On Crypto Custody Rules
The SEC’s Division of Trading and Markets has finally issued some guidance on how broker-dealers need to custody crypto asset securities – and it basically means they need to keep a close eye on customers’ assets.
So the main things they need to do are:
- Make sure they’ve got strong control over customer private keys
- Make sure they can keep customers’ assets safe and secure
- Make some plans for what to do in case of cyber or system failures
This clarity should help make compliance a whole lot easier – and will help institutions feel more confident about getting into the crypto business.
Market Impact and Bitcoin Price Outlook
The regulatory clarity is good news for liquidity – institutional participation and tokenization growth are all likely to get a boost. However, market sentiment is still pretty cautious.
Bitcoin is currently trading at around $86,717, with a 24-hour low of $85,316 and a high of $90,264. Trading volume is down a healthy 17%, suggesting that not many people are feeling confident enough to bet on the price just now.
While an immediate rebound is unlikely, the policy change has definitely laid the foundation for gradual growth.
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