The Federal Reserve has joined its fellow U.S. banking regulators in deleting its crypto guidance of previous years, including notices that banks should get pre-approvals before they get involved in crypto activity.

Now, all three agencies — including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. — have joined in reversing those previous policies, leaving crypto matters at banks in the hands of their managers and compliance executives. In the absence of guidance, the banking industry awaits new laws from Congress to define how the digital assets industry should operate in the U.S.

«These actions ensure the Board’s expectations remain aligned with evolving risks and further support innovation in the banking system,» the Fed said in the Thursday statement announcing the change.

Banking supervision of its state member banks is one of the multiple roles performed by the Fed, which is better known for its monetary policy work. The agency’s move on Thursday will specifically remove four pieces of crypto guidance the board signed onto in 2022 and 2023, highlighting risks to banks posed by the sector.

Fed officials «will instead monitor banks’ crypto-asset activities through the normal supervisory process.»

Read More: FDIC Reverses U.S. Crypto Banking Policy That Demanded Prior Approvals

Real estate tokenization—once a niche experiment—may soon become a core pillar of how property is financed, owned and traded, according to a Thursday report by Deloitte Center for Financial Services.

The market of tokenized real estate could reach $4 trillion by 2035, growing at a compound annual rate of 27% from the current size of under $300 billion, the firm forecasted.

Tokenization of real-world assets (RWA) is a red-hot sector at the intersection of crypto tech and traditional finance. It consists of creating digital versions of assets like bonds, funds and real estate, that represent ownerships on blockchain rails.
The process offers operational efficiencies, cheaper and faster settlements and broader investor access.

For the real estate sector, tokenization’s appeal lies in its ability to automate and simplify complex financial agreements, the report explained, such as launching a real estate fund on-chain with coded rules handling ownership transfers and capital flows. An example for this is Kin Capital’s $100 million real estate debt fund tokenization platform Chintai with trust-deed-based lending, Deloitte noted.

The report outlines a three-pronged evolution of tokenized property: private real estate funds, securitized loan ownership, and under-construction or undeveloped land projects. Of these, tokenized debt securities are expected to dominate, hitting $2.39 trillion in value by 2035, based on the report’s forecast. Private funds could contribute around $1 trillion, while land development assets may account for some $500 billion.

Despite the advantages, challenges remain, the report noted, especially around regulation, asset custody, cybersecurity and default scenarios.

Read more: Tokenized Funds’ Rapid Growth Comes With Red Flags: Moody’s

El Salvador’s Comisión Nacional de Activos Digitales (CNAD), the agency in charge of regulating digital assets in the Central American nation, is seeking to establish a cross-border regulatory sandbox with the U.S. Securities and Exchange Commission (SEC).

“We want to create international collaboration,” Juan Carlos Reyes, president of the CNAD, told CoinDesk in an interview. “Our biggest message is that digital assets don’t have any geographical barriers. Collaboration with regulators should not have international barriers either.”

El Salvador is in a unique situation in that it did not boast of strong financial institutions, or even of an existing ecosystem of developers, when President Nayib Bukele made bitcoin legal tender in 2021. That means the CNAD was able to start with a blank slate when it introduced a regulatory framework tailored to crypto.

Almost two years later after Reyes took over the agency, El Salvador’s advanced regulatory framework has incentivized crypto giants such as Tether, Bitfinex and Binance to open shop in the country.

The idea, Reyes said, is for the U.S. SEC to now use El Salvador as a live, real-world case study to evaluate streamlined regulatory approaches for digital assets — in other words, for the SEC to learn from El Salvador’s experience as it revamps its own regulatory framework in a post-Gensler world.

The pilot program proposed by the CNAD involves different scenarios: a U.S.-licensed traditional finance broker obtaining a digital asset license under CNAD regulations, and the development of two small-scale tokenization offerings facilitated by a CNAD-licensed tokenization company. Each scenario would be capped at $10,000.

These initiatives would support some of the objectives laid out by SEC Commissioner Hester Peirce in February, when she wrote that the SEC Crypto Task Force, which she now leads, would take a very different approach towards crypto regulation from here on out.

“CNAD really looked at [Pierce’s document] with a critical eye as to how we can help,” Erica Perkin, owner of The Perkin Law Firm and a member of CNAD’s advisory group, told CoinDesk. “We’re here. There’s data [the SEC] might want to collect. It’s difficult to collect in the U.S. … We’ve built a framework that’s nimble enough to work on the exact issues that the SEC is looking at, and we’re here to help and collect information on how we can best do that.”

The CNAD met with the SEC’s Crypto Task Force on April 22 to discuss the initiative. The meeting was constructive, according to Reyes and Perkin. “They asked good questions,” Perkin said. “They’re in an information-gathering phase. They were engaged and open to discussion.”

Reyes has already signed regulatory cooperation agreements with countries such as Argentina and Paraguay. In his view, the SEC seems to be ahead of the curve when it comes to understanding the regulatory needs of digital assets, whereas regulators in other jurisdictions have tended to see crypto regulation from a traditional finance perspective.

“The quality of people that make up the SEC Crypto Task Force is quite impressive. They get it. They understand the technology,” Reyes said. “We were able to have discussions that were on point about what’s needed in order to regulate the technology… It was very refreshing.”