From Risk to Resilience How Washington Redefined Crypto’s Role in the Financial System

The US has quietly rewritten how it sees crypto’s place in the financial system — and the implications could be profound. In its 2025 annual report, the Financial Stability Oversight Council (FSOC) dropped “digital assets” from its list of financial vulnerabilities, ending a three-year chapter that cast cryptocurrencies as systemic threats to US financial stability. The change marks a decisive pivot from containment to collaboration — and with it, a fresh wave of institutional confidence in regulated participation. This is not a mere tweak in tone; it’s a structural realignment that could redefine crypto recruitment, banking policy, and the demand for blockchain talent across enterprises.

From “vulnerability” to “development” — A policy reversal with real-world impact

From as early as 2022, FSOC had ranked crypto among the key hazards to the US financial architecture, warning that digital assets—particularly stablecoins—could trigger liquidity runs and amplifying instability. That perspective echoed the language of then-President Joe Biden’s Executive Order 14067, which framed crypto oversight as a matter of national risk management.

But in 2025, that narrative was overhauled. The FSOC's updated report moved digital assets into a neutral category of “significant market developments to monitor.” Absent were the prior years’ concerns about contagion. In their place were references to institutional growth, the tokenisation of traditional assets, and the integration of regulated instruments like spot Bitcoin and Ethereum exchange-traded funds (ETFs). For crypto advocates and financial institutions alike, this marks an end to the era of macroprudential suspicion.

Treasury Secretary Scott Bessent’s foreword encapsulated the shift. “Cataloguing vulnerabilities is not sufficient,” he wrote, asserting that sustained economic growth must be seen as “integral to financial stability.” That language repositions digital assets as contributors to — not detractors from — systemic resilience.

The structural convergence: Washington’s coordinated crypto détente

Three major policy shifts confirm that FSOC’s reclassification was no isolated edit. It reflects a deliberate effort across the executive, legislative, and regulatory branches to strip away the “systemic risk” stigma that kept major banks and pension funds at arm’s length from digital asset markets.

1. The White House pivot

President Donald Trump’s Executive Order 14178 formally revoked Biden’s earlier directive, replacing caution with endorsement. The new order declared US support for “the responsible growth and use of digital assets” — while explicitly banning a central bank digital currency. The administration’s Digital Assets Report reframed the government’s aims as an industrial policy focused on competitiveness: scaling tokenisation, strengthening stablecoin infrastructure, and asserting American leadership in blockchain innovation.

2. Congress delivers the legal scaffolding

In July 2025, the GENIUS Act gave FSOC a reason to retire its warnings. The Act established “permitted payment stablecoin issuers,” set out 100% reserve requirements, and brought issuers under the watch of the Fed, the OCC, the FDIC, and state regulators. Stablecoins, previously labelled as unregulated and “acutely vulnerable to runs,” now sit within a recognised supervisory framework. They are regulated, auditable, and—crucially—positioned as dollar assets, reinforcing the currency’s international role over the coming decade.

3. Banks rejoin the blockchain economy

Once constrained by accounting and supervisory friction, traditional banks are now being ushered back into the crypto markets. In January 2025, the Securities and Exchange Commission (SEC) rescinded accounting bulletin SAB 121, replacing it with SAB 122 to remove the requirement that custodial crypto assets appear as balance-sheet liabilities. The Office of the Comptroller of the Currency (OCC) followed by issuing Interpretive Letter 1188, authorising national banks to facilitate “riskless principal” crypto transactions — buying from one client and selling to another simultaneously.

Add to that the OCC’s explicit permission for banks to hold small amounts of native blockchain tokens to cover gas fees, and the picture becomes clear: digital asset operations are now embedded in federally sanctioned financial routines. Preliminary national trust charters granted to Circle, Ripple, Paxos, BitGo, and Fidelity Digital Assets seal the deal — crypto-native firms now wear the badge of federal oversight.

As one crypto recruiter in Washington observed, this coordinated alignment effectively shifts the hiring landscape: “What was once off-limits for compliance officers, risk analysts, and blockchain engineers in traditional banks is now open season.” This new regulatory clarity is already fuelling demand for compliance talent and web3 expertise across both incumbents and start-ups.

Regulatory confidence meets global caution

FSOC’s softened stance isn’t universal. Global financial watchdogs remain sceptical. The Financial Stability Board’s October 2025 review catalogued the cryptocurrency market’s doubling to $4 trillion and reiterated that “fragmented” oversight keeps latent vulnerabilities alive. The report’s language contrasted sharply with FSOC’s reprieve — the FSB found that linkages between crypto and traditional finance, though modest, are strengthening enough to warrant “heightened vigilance.”

The Financial Action Task Force (FATF) voiced similar concerns in its June 2025 update, revealing that only 40 of 138 jurisdictions are “largely compliant” with anti-money-laundering (AML) standards for digital assets. FATF estimated tens of billions in illicit crypto transactions, highlighting a cross-border compliance deficit. It warned that enforcement gaps in one country can compromise the global network.

FSOC did not entirely ignore these points. Its 2025 report still flagged misuse of dollar stablecoins for sanctions evasion and cited illicit-finance oversight as an ongoing priority. The relaxation, then, pertains strictly to systemic risk—not to the broader web of AML, sanctions, or cybersecurity enforcement that continues to intensify globally.

The mixed global tone means that while FSOC may have moved crypto out of the “danger zone,” international frameworks will still tighten. For blockchain professionals, it signals a sustained appetite for specialists in risk, compliance, and forensic accounting. That’s already visible in recruitment patterns tracked by crypto recruitment agencies across London, Singapore, and New York.

What FSOC’s reversal means for Bitcoin’s next chapter

By removing “vulnerability” language, FSOC has cleared a psychological and procedural path for large financial institutions. Insurers, asset managers, and pension funds—once wary of supervisory backlash—can now treat Bitcoin and Ethereum exposure via ETFs as ordinary portfolio strategy rather than reputational risk.

This does not equate to a government endorsement of crypto as a monetary asset. Rather, it reflects regulators’ belief that digital asset integration can be managed with existing prudential and market tools. FSOC now views spot ETFs as “market structures to monitor,” not contagion vectors. Combined with the GENIUS Act’s stablecoin framework, the pathway from fiat to blockchain-based settlement rails is being formalised.

This evolution will have tangible consequences across capital markets and web3 hiring pipelines:

• Custody talent boom: Banks re-entering the digital asset custody space need seasoned blockchain engineers, node security specialists, and compliance technologists to manage on-chain operations securely.
• Prudential control and DeFi integration: As the DeFi recruitment segment grows, institutions will hire hybrid experts who understand both traditional credit risk and decentralised market mechanics.
• Tokenisation specialists: With FSOC now referencing tokenised securities in neutral terms, asset managers are deploying internal teams for real-world asset (RWA) tokenisation projects.

For cryptocurrency recruiters, this secular opening is transformative. The easing of regulatory friction boosts institutional appetite for web3 recruitment — but it also heightens the bar for skill depth, cross-compliance literacy, and cybersecurity acumen.

The new balance of trust and oversight

Stablecoin issuance is now formally bound to banking regulation, yet still tethered to crypto’s real-time infrastructure. This hybrid zone—where fiat compliance meets decentralised architecture—demands professionals adept in both domains. Firms that can bridge those skill gaps will anchor the next chapter of blockchain recruitment in the US and beyond.

Crucially, FSOC’s new stance also removes the spectre of forced de-risking that had constrained banks’ participation. Prior supervisory letters discouraged institutions from serving crypto exchanges or custodying digital assets for clients. Their withdrawal, paired with OCC and SEC normalisation, flips the dynamic from prohibition to permission.

The ripple effect is visible across trading desks and treasury operations. With stablecoins now defined under law as “permitted payment instruments” and spot ETFs offering institutional gateways, banks can finally rebuild the operational bridges between fiat accounts, tokenised collateral, and crypto ETFs without triggering enhanced scrutiny.

From a recruitment standpoint, this shift transforms demand vectors. Crypto recruiters are reporting a surge in searches for derivatives analysts, digital-asset compliance officers, and blockchain integration engineers as institutions retool back-office systems for tokenised finance operations.

Risks remain—and opportunities proliferate

Even as FSOC’s tone softens, officials admit that confidence depends on the industry’s ability to remain stable under stress. If stablecoins lose their peg, or an ETF-linked custodian suffers a cyber breach, the council may revert to stronger language. “Significant developments to monitor” could quickly return to “vulnerabilities to contain.”

Yet as of now, the United States’ macroprudential establishment has effectively signalled that crypto is no longer a systemic disease to be quarantined — it is an economic subsystem to be managed, regulated, and perhaps harnessed for growth. For the blockchain workforce, this means more regulatory certainty, stronger institutions entering the space, and an elevation of professional standards across web3 talent acquisition.

As Bitcoin enters 2026, its path forward will depend not on speculative fervour, but on whether this new policy equilibrium—anchored by FSOC’s neutrality, the GENIUS Act’s clarity, and the OCC’s functional guidance—can survive the political and market shocks ahead.