Central banks around the world are not currently preparing to ban Bitcoin payments outright, but they are increasingly focused on regulating and controlling how cryptocurrencies, including Bitcoin, are used within the financial system. This approach reflects a broader effort to balance innovation with financial stability, consumer protection, and compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
In the United States, recent developments show a shift from adversarial regulation toward a more coordinated and transparent framework for digital assets. The Federal Reserve ended its specialized “Novel Activities Supervision Program” in August 2025, returning oversight of bank crypto activities to standard supervisory processes. This indicates a normalization rather than a crackdown on crypto banking activities. The U.S. government, through Executive Order 14178 issued in January 2025, explicitly prohibited the federal development of a central bank digital currency (CBDC) but emphasized protecting lawful access to public blockchains, preserving self-custody, and promoting the U.S. dollar’s role, including through lawful dollar-backed stablecoins. The President’s Working Group on Digital Asset Markets has been tasked with recommending regulatory and legislative proposals to create a coordinated government approach to digital assets, focusing on clarity and consumer protection rather than bans[1].
Similarly, the Office of the Comptroller of the Currency (OCC) has updated guidance allowing national banks to provide digital asset custody and settlement services, provided they manage risks appropriately. This suggests that banks can engage with cryptocurrencies like Bitcoin in a regulated, safe manner rather than being forced to avoid them entirely[1].
In Europe, the situation is somewhat more restrictive but still not a ban. For example, Cyprus, an EU member state, has tightened banking restrictions on crypto transactions in line with the EU’s Markets in Crypto-Assets (MiCA) regulation. Cyprus banks treat crypto businesses as high-risk clients, making it difficult for crypto firms to open or maintain bank accounts. The Central Bank of Cyprus has clarified that cryptocurrency is not legal tender, so banks are not obliged to accept crypto payments. This policy effectively limits the use of Bitcoin for payments through traditional banking channels but does not constitute a formal ban on Bitcoin itself[2].
The Federal Reserve in the U.S. has also taken enforcement actions against banks that fail to comply with AML regulations related to cryptocurrency customers, such as suspending United Texas Bank in Dallas for deficiencies in this area. This shows that regulatory focus is on ensuring compliance and risk management rather than banning Bitcoin payments outright[3].
On the industry side, there are ongoing debates and concerns about the risks posed by crypto firms seeking to expand into traditional banking roles. For instance, the Bank Policy Institute (BPI) has expressed concerns about Coinbase’s application for a national trust bank charter, fearing that such entities might engage in risky activities related to stablecoins and digital assets that could threaten financial stability. These concerns highlight the cautious stance regulators and banking associations take toward integrating crypto payments and services into the mainstream financial system[4].
Interestingly, some financial institutions and analysts predict that central banks might hold substantial Bitcoin reserves by 2030, alongside gold, as part of their asset portfolios. This suggests a recognition of Bitcoin’s potential value rather than an intent to ban its use[5].
In summary, central banks and regulators are not preparing to ban Bitcoin payments outright but are instead focusing on creating regulatory frameworks that ensure transparency, risk management, and compliance with existing financial laws. They are cautious about the risks cryptocurrencies pose but also acknowledge their growing role in the financial ecosystem. Restrictions on crypto payments tend to come from banking policies and regulatory compliance requirements rather than explicit bans on Bitcoin itself. The trend is toward regulated integration rather than prohibition.