Bitcoin News Today: Federal Reserve Ends Special Crypto Oversight Program Amid Industry and Political Pressure

The Federal Reserve has announced the termination of its specialized crypto banking oversight program, which was launched in August 2023 to monitor banks’ engagement with cryptocurrency and fintech activities. The program, established under the Biden administration, applied a tailored supervisory approach to digital assets such as stablecoins. On August 15, 2025, the central bank confirmed it will no longer maintain this targeted regime and will instead integrate crypto-related activities into its standard banking oversight framework [1].

This decision follows an executive order signed by President Donald Trump, directing federal regulators to eliminate guidance that could lead to unfair banking practices based on non-financial factors such as political or religious beliefs. The order explicitly referenced the controversial "Operation Chokepoint" policy and its perceived continuation under the previous administration, known in industry circles as "Operation Chokepoint 2.0." The Federal Reserve will also rescind its 2023 supervisory letter that established the special program [2].

The central bank stated that it has gained sufficient knowledge about the risks and risk management strategies associated with crypto activities to manage them through its general supervisory processes. The shift reflects a broader regulatory trend of reducing what critics viewed as disproportionate scrutiny of the crypto industry. The termination of the program is seen as a response to both political directives and industry pressures, with regulators emphasizing a move toward consistency in the treatment of crypto and traditional financial activities [3].

Pro-crypto Senator Cynthia Lummis hailed the decision as a “big win” for ending Operation Chokepoint 2.0, calling it “real progress toward a level playing field for crypto.” She noted that while more reforms remain, the ending of the targeted program represents a meaningful step in the direction of regulatory neutrality [4].

Industry figures also reacted positively. Michael Saylor, co-founder of MicroStrategy, whose company holds a large Bitcoin position, said the move “clears the road for Bitcoin and banking,” signaling regulatory alignment with broader market adoption [5]. Legal analysts, as reported by journalist Eleanor Terrett, described the Fed’s program as a key component of Operation Chokepoint 2.0, and its termination removes a significant mechanism of targeted oversight [6].

The Federal Reserve clarified that the decision does not indicate support for or opposition to the future role of crypto in banking. Instead, it reflects a strategic shift to apply the same supervisory standards to crypto activities as those applied to traditional financial operations. This aligns with recent regulatory actions, including a joint statement confirming that existing custody rules for traditional assets also apply to crypto assets [7].

The move has been interpreted as part of a broader regulatory rollback of crypto-specific constraints, though analysts caution that not all previous anti-crypto guidance has been rescinded. Further clarity may require additional regulatory actions or legislative developments. Nonetheless, the ending of the specialized program marks a significant shift in the U.S. regulatory approach toward crypto and fintech activities [6].

Sources:

[1] POLITICO, Federal Reserve shutters dedicated crypto oversight program

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

[2] Federal Reserve Ends Special Crypto Oversight Program

https://bravenewcoin.com/insights/federal-reserve-ends-special-crypto-oversight-program-moves-digital-asset-supervision-back-to-standard-process

[3] Fed to sunset program overseeing banks' use of emerging tech

https://www.americanbanker.com/news/fed-to-sunset-program-overseeing-banks-use-of-emerging-tech

[4] Senator Lummis Says Big Win For The Industry

https://coingape.com/federal-reserve-to-end-program-that-targeted-crypto-banking/

[5] Michael Saylor Says 'Road Is Now Clear For Bitcoin And Banking'

https://stocktwits.com/news-articles/markets/cryptocurrency/michael-saylor-says-road-is-now-clear-for-bitcoin-and-banking/chsPvwORdft

[6] Federal Reserve Ends Oversight Program Targeting Crypto Banking

https://blockonomi.com/federal-reserve-ends-oversight-program-targeting-crypto-banking-sector/

[7] Journalist Eleanor Terrett also commented on the development