The Federal Reserve announced on Friday the termination of its dedicated supervisory program overseeing U.S. banks' cryptocurrency and fintech activities. Initiated in 2023, the "novel activities" program required banks to notify regulators and comply with stringent guidelines before engaging in crypto services like custody, stablecoin issuance, or tokenization.
The Fed stated the program had achieved its goal of strengthening understanding of crypto-related risks and bank risk management practices. Moving forward, oversight of these activities will be integrated into the normal supervisory process rather than managed through a specialized unit. This shift reflects regulatory maturation, with the Fed citing improved comprehension of digital assets and their integration into traditional finance frameworks.
Banks may face simplified compliance procedures but must adapt to broader risk assessments covering cybersecurity, AML, and consumer protection. The change signals a coordinated future approach involving the OCC and FDIC, embedding crypto regulation within established financial oversight systems without reducing overall scrutiny.