Fed Unveils Fresh Guidance in Bid to Boost Bank Innovation

The Federal Reserve issued guidance to banks that encourages firms to engage in “certain innovative activities,” another step by US regulators to welcome novel business tie-ups into the fold of traditional finance.

“By creating a pathway for responsible, innovative products and services, the Board is helping ensure that the banking sector remains safe and sound while also modern, efficient and effective,” Fed Vice Chair for Supervision Michelle Bowman said in a statement.

The move on Wednesday came as the agency withdrew a previous 2023 policy statement, which sought to curb the use of certain crypto-asset activities. Fed Governor Michael ...