The Financial Stability Oversight Council (FSOC) has reclassified cryptocurrency as a 'significant market development' in its 2025 report, removing it from the list of financial-system risks. This shift is attributed to increased institutional adoption, including the introduction of spot Bitcoin and Ethereum ETFs and advancements in tokenization. Regulatory actions, such as Trump's Executive Order 14178, the GENIUS Act, and updates from the SEC and OCC regarding stablecoin use and crypto custody, have also played a crucial role in this reclassification. The crypto market has experienced steady growth in liquidity, while efforts to counter the financing of terrorism continue to be a part of ongoing regulatory discussions.