Federal financial regulators should take common-sense steps to respond to responsible innovation, including potentially through increased use of no-action guidance, sandboxes, safe harbors, coordination, and appropriate application requirements. Federal financial regulators should provide clear guidance affirming that many crypto-related activities are permissible for banks and other financial institutions, provided they do not threaten the safety and soundness of the institution. Clear guidance will also improve and better enforcement by establishing well-defined rules and expectations, fostering accountability, and enabling consistent application of regulations, leading to better understanding and compliance.