U.S. Fed Ends Special Crypto-Fintech Oversight Program

The U.S. Federal Reserve has officially ended its “Novel Activities Supervision Program,” a specialized initiative launched in August 2023 to monitor banks’ activities involving cryptocurrencies and fintech. This program was designed to oversee emerging technologies such as distributed ledger systems and banks’ financial interactions with crypto-related entities. The agency announced on August 15, 2025, that it would integrate these activities back into its standard supervisory process, no longer treating them as a separate oversight category [1].

Previously, banks were required to notify the Federal Reserve before engaging in crypto-related activities. Under the revised approach, these activities will now be subject to routine banking supervision, reducing regulatory barriers for U.S. banks involved in digital asset services [2]. The move, implemented in collaboration with the FDIC and OCC, reflects a shift in oversight practices and signals reduced scrutiny of crypto banking initiatives [3].

Industry participants anticipate that the easing of regulatory requirements will allow banks to engage more freely with digital asset markets, potentially spurring further adoption and innovation in the space. Financial institutions offering crypto custody and payment services may experience increased activity, with mainstream digital currencies like BTC and ETH likely to benefit [4].

The change does not indicate a reduction in overall oversight but rather a return to standard practices informed by the Fed’s recent specialized experience. The Federal Reserve emphasized that it now has a deeper understanding of associated risks and bank risk management practices, enabling it to address emerging issues through its routine supervisory tools [5].

This regulatory shift aligns with broader policy adjustments under the Trump administration, where several federal agencies, including the SEC, have curtailed enforcement actions against crypto firms. The Treasury has also indicated a shift toward aligning with White House policies, including the proposal for a national crypto reserve [6].

Notably, the Federal Reserve’s leadership has also undergone a recent transition. Adriana Kugler, a member of the Board and FOMC, resigned on August 8, 2025, and Stephen Miran, chair of the Council of Economic Advisors, has been nominated to serve as an interim replacement. The leadership change has sparked discussions about the political influence on the Fed’s operations, particularly as President Trump has publicly questioned the independence of Chair Jerome Powell [5].

While regulatory changes often precede brief market upticks, observers suggest that any positive trends will likely stabilize as routine oversight resumes. The banking sector is expected to see increased service offerings in custodial tokens and stablecoins tied to regulated markets. However, compliance standards remain a central concern for institutions navigating the evolving landscape [4].

“The Board is rescinding its 2022 supervisory letter establishing an expectation that state member banks provide advance notification of planned or current crypto-asset activities. As a result, the Board will no longer expect banks to provide notification and will instead monitor banks’ crypto-asset activities through the normal supervisory process,” the Federal Reserve Board stated in its official notice [3].

Sources:

[1] Federal Reserve, [https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250815a.htm](https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250815a.htm)

[2] Cointelegraph, [https://cointelegraph.com/news/federal-reserve-sunset-monitoring-banks-crypto](https://cointelegraph.com/news/federal-reserve-sunset-monitoring-banks-crypto)

[3] The Information, [https://www.theinformation.com/briefings/fed-wind-crypto-fintech-supervision-program](https://www.theinformation.com/briefings/fed-wind-crypto-fintech-supervision-program)

[4] CoinDesk, [https://www.coindesk.com/policy/2025/08/15/u-s-fed-officially-scraps-specialist-group-meant-to-oversee-crypto-issues](https://www.coindesk.com/policy/2025/08/15/u-s-fed-officially-scraps-specialist-group-meant-to-oversee-crypto-issues)

[5] Bankless, [https://www.bankless.com/read/federal-reserve-ends-novel-activities-supervision-program](https://www.bankless.com/read/federal-reserve-ends-novel-activities-supervision-program)

[6] Reuters, [https://www.reuters.com/sustainability/boards-policy-regulation/fed-scrap-program-devoted-policing-banks-crypto-fintech-activities-2025-08-15/](https://www.reuters.com/sustainability/boards-policy-regulation/fed-scrap-program-devoted-policing-banks-crypto-fintech-activities-2025-08-15/)