Jerome Powell Hints at Easing Crypto Rules for U.S. Banks

Federal Reserve Chair Jerome Powell said that the central bank may ease its stance on how banks handle digital assets. Speaking at The Economic Club of Chicago on April 16, Powell acknowledged that past guidance was shaped by concerns over past failures in the crypto sector. However, he noted that the financial environment surrounding digital assets has changed.

“We’ve been careful with how we allowed banks to engage with crypto, and other regulators were even more cautious,” Powell said. “Now, we’re looking at ways to ease some of that, while still protecting the system.”

The shift follows a broader change in direction under President Donald Trump’s administration, which took office in January. Federal banking agencies have started to update their policies to give banks more room to take part in digital asset services without needing special approvals in advance.

Congress Pushes Ahead with Stablecoin Legislation

Powell also pointed to progress in Congress on setting rules for stablecoins. Both the Senate and House have moved stablecoin bills through their committees, and President Trump has stated he wants a bill ready for signature soon.

Powell said stablecoins could see more everyday use, but only if rules are put in place to keep users informed and secure. 

“These are products that could catch on broadly,” he said. “But they need to come with clear standards and be easy for people to understand.”

He explained that earlier talks with lawmakers didn’t lead to a final bill, but there’s now stronger momentum in both chambers of Congress. The Federal Reserve is supporting this effort, viewing it as a step toward clarity in an area where usage is expanding quickly.

Banking Oversight May Be Revisited

When asked about banks offering crypto-related services, Powell said that current guidelines could be revisited. He explained that while strict rules were necessary at first, there may now be room to allow more flexibility, provided that basic safeguards remain in place.

“We want to encourage new ideas,” Powell said, “but not at the expense of safety for banks or their customers.”

He noted that certain crypto services, like digital asset custody, are already being used by some banks under existing supervision. Powell said those services can work safely if banks and regulators have a full understanding of what’s involved and manage them properly.

Growing Use of Stablecoins Prompts Regulatory Attention

With stablecoins processing close to $14 trillion in transfers last year, their role in the financial system continues to expand. That growth has prompted renewed focus from regulators and lawmakers.

Currently, there is no uniform federal law that governs stablecoins. Two major legislative proposals—the GENIUS Act and the STABLE Act—are under discussion to address that gap. Powell’s remarks suggest the Fed is ready to work alongside Congress to build a legal structure that supports growth while maintaining oversight.

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