Fed Ends Special Crypto Oversight Program for Banks

The U.S. Federal Reserve has officially terminated its Novel Activities Supervision Program, a dedicated initiative launched in August 2023 to impose heightened oversight on banks engaging in cryptocurrency and fintech activities. The program required banks to undergo specialized scrutiny for services like stablecoin custody, crypto asset management, and tokenization. The Fed now states it has gained sufficient understanding of the risks involved and will return these activities to standard banking supervision processes [1][2][3].

This regulatory shift is seen as a move toward easing compliance burdens on financial institutions. Previously, banks had to follow unique protocols under the Fed’s direct supervision. With the program’s end, crypto-related operations will now be evaluated under the broader, conventional supervisory process. The change is expected to reduce administrative complexity and may encourage banks to develop and offer more crypto-based products [4][5].

The Fed clarified that the termination does not mean a complete withdrawal of oversight. Crypto activities will still be subject to regular audits and inspections, with a focus on operational risks, cybersecurity, and adherence to existing banking laws [6]. The central bank emphasized that it has “significantly increased its understanding of crypto activities” and now considers these risks manageable within the traditional regulatory framework [7].

Industry analysts suggest the decision could position U.S. banks to become more competitive in the global crypto space. Compared to regions like Europe and Asia, where digital asset adoption has been more aggressive, U.S. regulators have historically imposed stricter constraints. This shift is expected to lower bureaucratic hurdles and foster greater innovation within the banking sector [8][9].

The move aligns with broader regulatory trends observed in 2025. In April, the Federal Reserve, along with the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), rolled back prior requirements that forced banks to obtain prior approval before offering crypto services [10]. The timing of the decision also coincides with a wider regulatory environment that has increasingly favored easing financial constraints, though the Fed did not explicitly attribute the move to political factors [11].

For the market, the decision signals a more flexible regulatory approach, potentially encouraging greater participation in the U.S. crypto ecosystem. While the Fed did not outline specific metrics or forecasts, analysts have indicated that the supervisory shift could lead to increased diversification in banking services and a broader adoption of blockchain innovations [4][9].

Sources:

[1] title1: Federal Reserve shutters dedicated crypto oversight program

(url1: https://subscriber.politicopro.com/article/2025/08/federal-reserve-crypto-oversight-00511819)

[2] title2: The Fed Lightens Its Control Over Banks Active in Crypto

(url2: https://www.cointribune.com/en/the-fed-lightens-its-control-over-banks-active-in-crypto/)

[3] title3: Fed Ends Crypto and Fintech Oversight Program for Banks

(url3: https://coinpaper.com/10535/fed-ends-crypto-oversight-program-as-trump-eases-digital-asset-rules)

[4] title4: Fed Ends Special Crypto and Fintech Bank Oversight ...

(url4: https://www.ainvest.com/news/fed-ends-special-crypto-fintech-bank-oversight-program-2508/)

[5] title5: Fed to End Program That Stepped Up Bank-Crypto Scrutiny

(url5: https://news.bloombergtax.com/financial-accounting/fed-to-end-program-that-stepped-up-bank-crypto-scrutiny)

[6] title6: Fed Ends Crypto-focused supervision, returns oversight to ...

(url6: https://www.msn.com/en-us/money/markets/fed-ends-crypto-focused-supervision-returns-oversight-to-standard-processes/ar-AA1KAWyp?ocid=finance-verthp-feeds)

[7] title7: Federal Reserve Ends Special Crypto Bank Oversight ...

(url7: https://www.ainvest.com/news/federal-reserve-ends-special-crypto-bank-oversight-program-2508/)

[8] title8: Fed Scraps Crypto Oversight After Trump's "Debanking" ...

(url8: https://cryptonews.com/news/fed-scraps-crypto-oversight-program-after-trumps-debanking-outcry/)

[9] title9: Fed Ends Special Crypto Oversight Program

(url9: https://www.rebellionaire.com/post/federal-reserve-crypto-oversight-ends)

[10] title10: US Fed to end oversight program for banks' crypto activities

(url10: https://www.coinglass.com/ru/news/534916)

[11] title11: Fed Ends Special Crypto Oversight Program