- Jerome Powell says the Fed may ease crypto banking rules, especially around stablecoins.
- He called for a clear legal framework from Congress to support safer innovation in the sector.
- Looser rules could let banks custody crypto and handle stablecoin payments in the near future.
Federal Reserve Chair Jerome Powell made some waves on Wednesday after signaling the U.S. is warming up to the idea of loosening crypto-related banking regulations—a notable shift from the Fed’s cautious stance just a year or two ago.
What Did Powell Say?
Speaking at the Economic Club of Chicago, Powell addressed the growing role of crypto in the broader economy, especially stablecoins. He said the Fed is looking to ease up on some of the tighter rules that had made it tough for banks to interact with digital assets.
“There’ll be some loosening of that,” Powell said, referring to guidance that’s kept banks at arm’s length from crypto for a while now.
But he made it clear—it’s not a free-for-all. Innovation’s great, he said, but it’s gotta be done in a way that keeps the financial system stable and sound.
Why This Matters
Let’s not forget—Powell and the Fed weren’t always this open to crypto. Just last year, there was still plenty of hesitation following high-profile collapses and fraud cases in the space. But times are changing.
Stablecoins have gained traction. Congress is finally kicking around some bipartisan ideas for a legal framework. And Powell, for one, thinks that’s overdue.
“Congress is again looking at both the Senate and the House for a framework… that’s a good idea. We need that,” he said.
These digital dollars are becoming a big part of how value moves around online. And while they’re still a bit of a gray area legally, Powell stressed that any new rules have to come with strong consumer protections and real transparency.
Could Banks Get In on the Action?
That’s the big question. If the Fed does relax things, U.S. banks might soon be able to store crypto for customers, or even process stablecoin payments—something they’ve mostly avoided up to now because of the regulatory murk.
This would be a big deal for the industry, which has long said it’s been stuck waiting for regulators to catch up.
According to Sid Powell (no relation), CEO of Maple Finance, this feels like a turning point.
“Powell discusses the need for a legal framework for stablecoins. This is a shift in tone from prior years and reflects a maturity of the space,” he told Benzinga. “It shows the Fed understands stablecoins could end up playing a huge role in the U.S. economy.”
Looking Ahead
All in all, Powell’s comments may be some of the clearest signs yet that regulators aren’t trying to choke off crypto—they’re just trying to figure out how to make it fit into the existing system.
If things go the way they seem to be headed, banks might finally be able to dive into digital assets without jumping through quite so many hoops. Whether it’s custody, payments, or even working with stablecoins directly, the door could soon be open—at least a crack.
