US Financial Watchdog No Longer Sees Crypto as Systemic Threat: Report
The Financial Stability Oversight Council has eliminated crypto from its listing of systemic monetary threats in its 2025 annual report. This is a dramatic regulatory shift attributable to the transformation happening under the Trump administration.
The 86-page document, permitted December 11, eliminates the dire warnings about digital belongings that dominated earlier years, as an alternative emphasizing accountable progress and regulatory readability for the sector.
The FSOC’s newest evaluation contrasts sharply with its 2024 report, which warned that stablecoins represented an acute vulnerability to runs absent applicable risk-management requirements.
This 12 months’s report acknowledges crypto’s function in innovation and financial growth, whereas noting that latest legislative progress has addressed most of the considerations that beforehand existed.
The council now describes digital belongings as facilitating safe, environment friendly transactions by distributed ledger expertise quite than framing them as destabilizing forces.
Legislative Progress and Banking Access Reforms
The transformation stems largely from the passage of the GENIUS Act in July, which established America’s first complete federal framework for cost stablecoins.
The laws requires licensed issuers to keep up reserves in extremely liquid belongings, such as U.S. Treasuries, and prohibits rehypothecation apart from restricted functions.
Treasury Secretary Scott Bessent famous within the report that continued use of dollar-denominated stablecoins helps the greenback’s function in worldwide finance.
Beyond stablecoins, federal businesses have systematically withdrawn restrictive steerage that beforehand discouraged banks from participating with crypto companies.
The SEC eradicated prior-notification necessities for providing digital asset custody companies, whereas banking regulators rescinded joint statements that successfully pushed crypto exercise exterior conventional finance.
The Federal Reserve ended its novel actions supervision program, returning oversight to regular supervisory processes.
The Office of the Comptroller of the Currency released preliminary findings exhibiting all 9 largest nationwide banks imposed inappropriate restrictions on lawful crypto companies between 2020 and 2023.
JPMorgan Chase, Bank of America, Citibank, Wells Fargo, and others maintained inside insurance policies requiring escalated approvals or blanket limitations on digital asset firms, alongside sectors such as firearms and grownup leisure.
Comptroller Jonathan Gould described the practices as “dangerous to lawful enterprises” and an inappropriate use of nationwide financial institution charters.
The findings construct on President Trump’s August government order guaranteeing honest banking entry and state-level honest entry legal guidelines in Florida, Idaho, and Tennessee, designed to stop ideological account closures.
Market Structure Legislation Races Senate Deadline
Last week, Senator Cynthia Lummis pushed for immediate Senate Banking Committee markup of the Responsible Financial Innovation Act earlier than the vacation recess, warning negotiations can not drift into February with out risking election-year paralysis.
She informed the Blockchain Association Policy Summit that bipartisan drafts have been rewritten repeatedly, exhausting employees members as lawmakers wrestle to reconcile the House and Senate approaches to defining which tokens fall exterior securities classification.
The House passed the Digital Asset Market Clarity Act in July, giving the CFTC main oversight of digital commodities whereas preserving SEC authority over fundraising.
The Senate model makes use of the time period “ancillary belongings” and faces rigidity over decentralized finance regulation.
Senator Thom Tillis warned that lacking the December window might freeze the invoice for the remainder of 2026.
However, Senator Mark Warner additionally instructed finishing all the pieces earlier than the vacation recess can be troublesome, noting the White House nonetheless hadn’t offered ultimate language on quorum and ethics guidelines.
Traditional Finance Embraces Tokenized Products
JPMorgan Chase demonstrated the sector’s mainstreaming by launching its first tokenized money-market fund on the Ethereum community.
The My OnChain Net Yield Fund begins with $100 million of the financial institution’s capital earlier than opening to certified buyers with minimal investments of $1 million.
The MONY fund accepts subscriptions in money or USDC, demonstrating institutional adoption of crypto-native cost rails for settlement alongside conventional money.
JPMorgan is launching its first tokenized money-market fund on Ethereum, reviews the WSJ. #JPMorgan #Ethereum https://t.co/bjjIFNFRnJ
— Cryptonews.com (@cryptonews) December 15, 2025
The launch follows the GENIUS Act’s regulatory readability, with Wall Street accelerating tokenization efforts throughout equities, bonds, and real-world belongings.
John Donohue, JPMorgan’s world liquidity head, cited a “huge quantity of curiosity from purchasers round tokenization” and the financial institution’s intention to guide the area with product lineups that match conventional money-market fund selections on the blockchain.
The integration of blockchain into core monetary merchandise, as soon as thought-about distant from crypto, signifies the expertise is progressing from experimental to infrastructure-grade standing inside conventional finance.
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