In keeping with Washington’s friendlier attitude toward cryptocurrencies, the Federal Reserve and the Federal Deposit Insurance Corp. on Thursday pulled statements they had issued early in 2023 that had indicated a tougher stance on crypto regulation for banks. The regulators’ new approach, as indicated in a statement issued late Thursday by the FDIC, says “banking organizations may engage in permissible crypto-asset activities and provide products and services to persons and firms engaged in crypto-asset related activities, consistent with safety and soundness and applicable laws and regulations.”

While the regulators will continue to keep a close watch on digital currencies, the relaxed approach means…