FSOC drops crypto from systemic risk list as tokenization gains momentum

FSOC removes digital assets from its systemic risk list as U.S. regulators pivot to targeted oversight while tokenization on Solana and wrapped XRP gain traction.

• FSOCs 2025 report drops prior systemic risk warnings on crypto, citing clearer rules and a sharper focus on long-term growth over hypothetical vulnerabilities.
• Regulators still flag U.S. dollar stablecoins and illicit finance risks even as banks face fewer blanket warnings about crypto engagement.
• JPMorgans Solana-based tokenized commercial paper and wrapped XRPs multichain rollout signal that tokenization is moving into mainstream market plumbing.

The Financial Stability Oversight Council (FSOC) has removed digital assets from its list of potential systemic risks, according to the councils annual report released on December 11, 2025.

The decision represents a reversal from the councils 2022 report, which stated that crypto-asset activities “could pose risks to the stability of the U.S. financial system.” The earlier report cited concerns about leverage, interconnections between traditional finance and crypto markets, and the lack of unified oversight.

Treasury Secretary Scott Bessent stated in the report‘s opening letter that the council’s mandate now focuses on long-term economic growth rather than identifying every theoretical “vulnerability.” The 2025 annual report has been shortened compared to previous years, with regulatory priorities narrowed, according to the document.

FSOC removes digital assets

The latest report does not include explicit systemic risk warnings related to digital assets. Instead, the document notes clearer regulatory structures and the withdrawal of previous warnings about banks engaging with the crypto sector. Regulators stated that U.S. dollar stablecoins still require monitoring, particularly regarding potential misuse in illicit finance.

The policy shift occurs as crypto-related legislation advances in Congress. Recent institutional developments include JPMorgan‘s tokenized commercial paper issuance on Solana, Wrapped XRP’s expansion across multiple blockchain platforms including Solana, Ethereum, Optimism, and HyperEVM, and tokenization initiatives from banks and asset managers, according to industry reports.

The removal of crypto from the systemic risk list indicates federal agencies are preparing for digital assets, tokenized instruments, and blockchain-based settlement systems to play a role in U.S. financial markets, according to regulatory observers. The change suggests oversight may become more targeted as digital assets are evaluated alongside other emerging technologies.