The Financial Stability Oversight Council has removed crypto from its list of systemic financial 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, approved December 11, eliminates the dire warnings about digital assets that dominated previous years, instead emphasizing responsible growth and regulatory clarity for the sector.
The FSOC’s latest assessment contrasts sharply with its 2024 report, which warned that stablecoins represented an acute vulnerability to runs absent appropriate risk-management standards.
This year’s report acknowledges crypto’s role in innovation and economic development, while noting that recent legislative progress has addressed many of the concerns that previously existed.
The council now describes digital assets as facilitating secure, efficient transactions through distributed ledger technology rather than framing them as destabilizing forces.
Source: FSOCLegislative Progress and Banking Access Reforms
The transformation stems largely from the passage of the GENIUS Act in July, which established America’s first comprehensive federal framework for payment stablecoins.
The legislation requires licensed issuers to maintain reserves in highly liquid assets, such as U.S. Treasuries, and prohibits rehypothecation except for limited purposes.
Treasury Secretary Scott Bessent noted in the report that continued use of dollar-denominated stablecoins supports the dollar’s role in international finance.
Beyond stablecoins, federal agencies have systematically withdrawn restrictive guidance that previously discouraged banks from engaging with crypto firms.
The SEC eliminated prior-notification requirements for offering digital asset custody services, while banking regulators rescinded joint statements that effectively pushed crypto activity outside traditional finance.
The Federal Reserve ended its novel activities supervision program, returning oversight to normal supervisory processes.
The Office of the Comptroller of the Currency released preliminary findings showing all nine largest national banks imposed inappropriate restrictions on lawful crypto businesses between 2020 and 2023.
JPMorgan Chase, Bank of America, Citibank, Wells Fargo, and others maintained internal policies requiring escalated approvals or blanket limitations on digital asset companies, alongside sectors such as firearms and adult entertainment.
Comptroller Jonathan Gould described the practices as “harmful to lawful enterprises” and an inappropriate use of national bank charters.
The findings build on President Trump’s August executive order guaranteeing fair banking access and state-level fair access laws in Florida, Idaho, and Tennessee, designed to prevent 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 before the holiday recess, warning negotiations cannot drift into February without risking election-year paralysis.
She told the Blockchain Association Policy Summit that bipartisan drafts have been rewritten repeatedly, exhausting staff members as lawmakers struggle to reconcile the House and Senate approaches to defining which tokens fall outside securities classification.
The House passed the Digital Asset Market Clarity Act in July, giving the CFTC primary oversight of digital commodities while preserving SEC authority over fundraising.
The Senate version uses the term “ancillary assets” and faces tension over decentralized finance regulation.
Senator Thom Tillis warned that missing the December window could freeze the bill for the rest of 2026.
However, Senator Mark Warner also suggested completing everything before the holiday recess would be difficult, noting the White House still hadn’t provided final language on quorum and ethics rules.
Traditional Finance Embraces Tokenized Products
JPMorgan Chase demonstrated the sector’s mainstreaming by launching its first tokenized money-market fund on the Ethereum network.
The My OnChain Net Yield Fund begins with $100 million of the bank’s capital before opening to qualified investors with minimum investments of $1 million.
The MONY fund accepts subscriptions in cash or USDC, demonstrating institutional adoption of crypto-native payment rails for settlement alongside traditional cash.
The launch follows the GENIUS Act’s regulatory clarity, with Wall Street accelerating tokenization efforts across equities, bonds, and real-world assets.
John Donohue, JPMorgan’s global liquidity head, cited a “massive amount of interest from clients around tokenization” and the bank’s intention to lead the space with product lineups that match traditional money-market fund choices on the blockchain.
The integration of blockchain into core financial products, once considered distant from crypto, indicates the technology is progressing from experimental to infrastructure-grade status within traditional finance.
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