Federal Reserve Greenlights Banks for Crypto Services Bitcoin Surges 5.7%

Federal Reserve Chair Jerome Powell's testimony before Congress on June 24, 2025, marked a significant moment for the cryptocurrency industry. Powell explicitly stated that U.S. banks are allowed to offer services to cryptocurrency firms, provided they adhere to appropriate risk management protocols. This statement was interpreted by analysts, institutions, and crypto investors as a regulatory endorsement that could pave the way for substantial institutional investment in the crypto market. Essentially, the Fed has given banks the green light to engage with the crypto sector.

The market responded swiftly to Powell's remarks. On the same day, institutional investors injected over $588 million into Bitcoin spot ETFs, with an additional $71 million flowing into Ethereum ETFs. Bitcoin's price surged past $105,000, briefly reaching over $106,000, with traders now setting their sights on the $112,000 level as the next major resistance point. This price movement coincided with Powell's statement and a broader shift in regulatory attitudes towards cryptocurrencies.

In addition to his remarks on bank involvement in crypto, Powell also expressed support for upcoming stablecoin legislation, particularly the GENIUS Act. This legislation aims to regulate the issuance and backing of stablecoins within the U.S. Stablecoins play a critical role in the crypto economy, serving as trading pairs on exchanges and facilitating global money transfers. Clear regulation around stablecoins would enhance the infrastructure, build investor confidence, and attract more capital into the crypto space.