Crypto Vanishes From US Banks’ Regulatory List

What to Know:

• FSOC has removed digital assets from its list of financial-system vulnerabilities.
• This shift is supported by coordinated actions across various agencies, including the White House, Congress, SEC, and OCC.
• While the US de-escalates systemic risk concerns, global watchdogs remain cautious, focusing on AML compliance and cross-border flows.

The Financial Stability Oversight Council (FSOC) has notably shifted its stance on digital assets, removing them from its list of financial-system vulnerabilities in its 2025 annual report, signaling a major change in how US regulators view the crypto space. This decision reflects growing institutional participation through spot Bitcoin and Ethereum ETFs and the tokenization of traditional assets. The shift suggests that regulators now see digital assets as a growing sector to monitor rather than a systemic threat requiring immediate intervention.

The 2025 report explicitly notes that US regulators have “withdrawn previous broad warnings” to financial institutions about crypto involvement, suggesting a more normalized approach to the industry. Treasury Secretary Scott Bessent’s cover letter emphasizes long-term economic growth as integral to financial stability, further underscoring the change in perspective.

Several coordinated moves across different agencies support this policy shift. President Donald Trump’s Executive Order 14178 revoked Biden’s crypto EO and set a policy to “support the responsible growth and use of digital assets,” while Congress passed the GENIUS Act, creating “permitted payment stablecoin issuers” with strict regulatory oversight.

The SEC’s rescission of SAB 121 via SAB 122 and the OCC’s Interpretive Letter 1188, which allows national banks to act as intermediaries in “riskless principal” crypto transactions, further facilitate bank re-engagement with the crypto sector. These actions collectively signal a coordinated de-escalation of systemic-risk concerns regarding digital assets.

Despite the US de-escalation, global watchdogs like the Financial Stability Board (FSB) and the Financial Action Task Force (FATF) remain cautious. The FSB’s October 2025 review noted the significant growth in crypto’s global market cap and warned of “significant gaps” and “fragmented, inconsistent” implementation of crypto standards, while FATF highlighted the need for stricter AML compliance and the risks of illicit flows.

The FSOC’s decision to drop the “vulnerability” language removes the macroprudential stigma that made large institutions wary of crypto exposure. The SEC’s approval of spot Bitcoin and Ethereum ETFs in 2024, combined with the queue of additional crypto ETF filings in 2025, has normalized listed exposure to BTC at an institutional scale, treating these ETFs as a market structure to monitor rather than a contagion channel.

The regulatory landscape for Bitcoin and other digital assets is evolving, with the US taking a more measured approach while international bodies emphasize the need for vigilance and compliance. This shift could open new institutional channels for Bitcoin, driven by the formalization of ETF channels, bank plumbing, and stablecoin rails.

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Source: Original article