US FSOC Annual Report: Cryptocurrency Officially Removed from the "Systemic Financial Risk" List

The Financial Stability Oversight Council (FSOC) has shown a significant shift in its regulatory stance on cryptocurrencies in its latest 2025 annual report. In this 86-page document, FSOC officially removed digital assets from the “Systemic Financial Risk” watchlist, marking a fundamental change in the U.S. regulators’ core assessment of the crypto industry.

Unlike the 2024 report, which focused on stablecoin run risks and market confidence shocks, the 2025 report no longer emphasizes risk warnings but instead highlights regulatory clarity, compliance frameworks, and the actual financial functions of digital assets. FSOC explicitly states that distributed ledger technology has practical value in enhancing transaction efficiency and security.

A key background for this shift is the passage of the “Guidance and Establishment of the U.S. Stablecoin National Innovation Act” (GENIUS Act) in July 2025. This legislation provides a clear framework for stablecoin issuance, reserve management, and risk control, and is seen as a crucial institutional foundation for reducing financial stability risks and promoting stablecoin innovation in the U.S.

The report also discloses that federal banking regulators have adjusted their attitudes toward traditional financial institutions’ involvement in crypto activities. FSOC withdrew its previous risk-oriented joint statement and removed the “pre-approval not opposed” threshold for certain crypto activities, allowing banks to directly participate in digital asset custody, tokenization, and blockchain-related activities under compliance.

FSOC believes that the successful operation of spot Bitcoin ETFs and Ethereum ETFs in 2025, along with the accelerated development of real-world asset tokenization, reflect a maturing crypto market. The Office of the Comptroller of the Currency (OCC) has also approved some crypto businesses and granted preliminary trust licenses to Circle, Ripple, and Fidelity Digital Assets.

Although the report acknowledges that stablecoins still pose illegal financial risks, it emphasizes that most on-chain activities are highly transparent and can be regulated more effectively without stifling innovation. FSOC’s conclusion indicates that the U.S. has moved from the “risk prevention” stage to the “systemic integration and development guidance” stage.

However, the Financial Stability Board (FSB) also issued a warning that divergences in crypto regulation among major global economies could trigger regulatory arbitrage. Despite ongoing efforts by the U.S., the EU, and Singapore to implement new regulations, a unified international framework has yet to be established, and the long-term stability of the crypto market still depends on further global regulatory coordination.