U.S. Fed Ends Special Crypto Oversight Program After 2023 Launch

The U.S. Federal Reserve announced on August 15, 2025, that it has terminated its "Novel Activities Supervision Program" (NASP), a specialized oversight initiative for banks engaged in cryptocurrency and fintech activities [1]. The program, introduced in 2023 under Vice Chairman Michael Barr, imposed additional compliance measures on banks dealing with crypto custody, stablecoins, and tokenization [2]. With the program's conclusion, the Fed stated that oversight of these activities will now be integrated into its standard supervisory framework, eliminating the need for the targeted approach [3].

The decision reflects the Fed’s belief that it has gained sufficient understanding of the risks associated with digital assets and the risk management practices of banks. As a result, the central bank said it no longer requires a separate program to manage these risks [4]. Banks offering crypto services will now be subject to the same general supervisory standards as other financial institutions, reducing the previously imposed regulatory burden [5]. Previously, institutions had to obtain specific approvals and follow strict protocols to engage in activities such as crypto custody or stablecoin operations, but these will now be evaluated under routine oversight.

Analysts suggest that the move may encourage U.S. banks to explore more innovative financial products involving digital assets [6]. The reduction in specialized oversight could enhance the competitive advantage of American banks compared to those in other jurisdictions where crypto regulations have already evolved. However, the Fed remains committed to monitoring operational risks, cybersecurity, and compliance through its regular audit and inspection processes [7].

The termination of the NASP aligns with broader regulatory shifts under the Biden administration, which have sought to integrate fintech and crypto supervision into existing regulatory frameworks [8]. The Fed emphasized that while the program is ending, it will continue to ensure banks effectively manage the risks tied to digital assets. The move highlights the ongoing effort by regulators to balance innovation with risk control in the evolving financial landscape [9].

The impact of this shift may be seen in how banks adapt their compliance strategies, particularly for digital asset custody and settlement activities involving assets like BTC, ETH, and stablecoins. The change may influence the pace of crypto integration into traditional financial services and potentially affect how banks structure their digital asset offerings.

The Fed’s official statement noted that the knowledge gained from the NASP will be incorporated into standard supervisory practices, and the 2023 supervisory letter creating the program has been rescinded [2]. This transition is expected to streamline the regulatory environment for banks involved in crypto, though its long-term effects on market stability and innovation remain to be seen.

Sources:

[1] Federal Reserve Board

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250815a.htm

[2] POLITICO

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

[3] Cointribune

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

[4] AInvest

https://www.ainvest.com/news/fed-ends-special-crypto-oversight-program-effective-august-2025-2508/

[5] Cointribune

[6] Cointribune

[7] Cointribune

[8] Fidelity

https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202508151344BENZINGAFULLNGTH47163808

[9] Coinpaper

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