Fed Ends Special Crypto and Fintech Bank Oversight Program

The U.S. Federal Reserve has announced the termination of the “Novel Activities Supervision Program,” a specialized initiative launched in August 2023 to monitor banks’ engagement with cryptocurrency and fintech activities [1]. The program was designed to closely scrutinize risks associated with banks providing services—such as deposits, payments, and lending—to crypto-related entities and financial technology firms [2]. In a notice issued on Friday, the Fed stated that the program will be phased out and that oversight of such activities will now be integrated into the standard supervisory framework [3].

The decision reflects the Fed’s assessment that it has gained sufficient insight into the risks and management practices related to crypto and fintech banking activities since the program’s inception [4]. The central bank emphasized that the move does not indicate a reduction in oversight but rather a shift in strategy to embed crypto-related supervision into routine processes. This transition aims to streamline regulatory approaches while maintaining risk-focused monitoring [5].

The Fed described the program as a temporary, risk-based measure intended to address the unique challenges posed by novel financial innovations. With the program’s conclusion, the Fed said it will continue to monitor banks’ emerging activities through its ongoing supervisory mechanisms [6]. This change aligns with a broader trend of regulatory bodies recalibrating their approaches to digital assets and fintech as the market and institutions adapt to the evolving landscape [7].

The decision has been interpreted as a sign of the U.S. government’s evolving stance toward digital assets, particularly under the current administration, which has shown a more accommodative approach to crypto-related businesses [1]. For example, the Securities and Exchange Commission has scaled back several enforcement actions targeting crypto companies, and the Treasury has signaled support for a national crypto reserve [2].

However, analysts have highlighted potential uncertainties surrounding the effectiveness of standard oversight in managing the distinct risks of crypto-related banking activities [6]. While the shift may reduce regulatory friction and support innovation, it also raises concerns about whether the transition will maintain appropriate risk management standards. The outcome of this policy change will likely influence the broader regulatory environment for digital assets in the coming years [7].

Source: [1] Fed scraps oversight program for banks' crypto, fintech (https://cryptobriefing.com/crypto-bank-oversight-fed-decision/)

[2] US Fed To End Oversight Program For Banks' Crypto (https://cointelegraph.com/news/federal-reserve-sunset-monitoring-banks-crypto)

[3] Fed to End Program That Stepped Up Bank-Crypto Scrutiny (https://www.bloomberg.com/news/articles/2025-08-15/fed-to-end-program-that-stepped-up-bank-crypto-scrutiny)

[4] Federal Reserve to End Special Oversight of Crypto and (https://cryptodnes.bg/en/federal-reserve-to-end-special-oversight-of-crypto-and-fintech-bank-activities/)

[5] Fed Ends Special Program to Supervise Innovative (https://www.morningstar.com/news/dow-jones/202508155227/fed-ends-special-program-to-supervise-innovative-financial-activities)

[6] US Federal Reserve shutters crypto bank supervision (https://www.theblock.co/post/367138/us-federal-reserve-shutters-crypto-bank-supervision-program-amid-broader-regulatory-pullback)

[7] Fed ends crypto-focused supervision, returns oversight to (https://www.mitrade.com/insights/news/live-news/article-3-1044291-20250816)