Jerome Powell, the Chair of the Federal Reserve, announced that banks can offer digital currency services to customers, provided that the associated risks are effectively managed. This statement followed the Federal Reserve’s decision to maintain interest rates between 4.25% to 4.5% after three consecutive cuts in late 2024. Powell addressed questions about the potential impacts of the digital currency market on financial stability. He explained that it is the Federal Reserve’s responsibility to supervise banks. Powell stated, ‘Banks are fully capable of serving crypto customers as long as they understand the relevant risks, manage them effectively, and do it safely.’ Recently, the U.S. Securities and Exchange Commission (SEC) revoked the SAB 121 law, which previously prohibited banks from offering digital asset custody services. As a result, banks now have more flexibility to provide crypto services, potentially leading to wider acceptance and greater integration of digital currencies into traditional financial systems. Powell emphasized that many banks under Federal Reserve supervision are currently engaged in crypto-related activities. However, he highlighted the need for banks to be cautious when dealing with new asset classes like digital currencies: ‘We are not against innovation, and we certainly do not want to take actions that would cause banks to turn away completely legal customers just out of fear of excessive risk.’ The crypto community has reacted positively to Powell’s statements, viewing them as a sign of increasing acceptance of digital currencies in the traditional financial world. Hunter Horsley, the CEO of Bitwise, said, ‘Banks will be the main catalyst for the crypto sector in 2025. The era of widespread acceptance is beginning.’ However, Eli Norit, a Fox Business reporter, has rejected these optimistic views. According to her, while banks are willing to collaborate with crypto customers, legal challenges make entry into this sector very difficult for them. You can view the live and real-time prices of all tokens and cryptocurrencies on the momentary digital currency price page.
