Why It Matters

Federal banking regulators have cycled through permitting, restricting, and again permitting crypto activities as presidential administrations have changed since 2017, according to a new Congressional Research Service (CRS) report. It notes that legislation would result in a more durable outcome, reducing the likelihood of frequent regulatory changes, and that Congress may consider whether a more permanent solution allowing or restricting crypto activities would be preferable.

At stake is whether activities involving cryptocurrencies and digital assets qualify as part of the legally recognized “business of banking” and whether they can be conducted without jeopardizing bank safety and soundness. Because bank losses may…