Fed Ends Special Crypto Oversight Program, Integrates into Standard Supervision

The U.S. Federal Reserve has officially concluded its Novel Activities Supervision Program, a specialized initiative introduced in 2023 to monitor banks’ engagement with cryptocurrencies, stablecoins, and fintech innovations [1]. This move marks a strategic shift in regulatory approach, as oversight of these activities will now be integrated into the standard supervisory processes of the Federal Reserve [2]. The decision was announced by Federal Reserve Board Chair Jerome Powell, who emphasized that the Board is “integrating [knowledge] and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the [novel activities supervision] program” [1].

The program was initially designed to provide focused oversight of emerging financial technologies, particularly in an environment where the regulatory landscape was still evolving. However, with growing institutional knowledge and regulatory confidence, the Fed has opted to streamline its approach. The integration into regular practices is seen as a sign of regulatory maturation and a more conventional treatment of crypto-related activities [2].

This decision is part of broader legislative and regulatory developments, including the GENIUS Act of 2025, which imposes stricter guidelines for stablecoin issuance. The alignment with this legislation reflects a coordinated effort to stabilize the regulatory expectations around digital assets, particularly stablecoins, and to provide operational clarity to financial institutions [1]. The shift is also expected to foster greater confidence among banks engaging in digital asset custody and related services, potentially encouraging broader adoption of stablecoins in the U.S. payment system [2].

Industry observers have noted that this move signals a more mature and integrated regulatory stance. Some view it as a necessary evolution in the oversight framework, allowing for the coexistence of innovation and systemic stability [4]. The absence of significant market volatility following the announcement suggests that the market is interpreting the decision as a stabilizing measure rather than a disruptive one [1].

The Federal Reserve’s actions align with a broader trend of regulatory bodies, including the Securities and Exchange Commission (SEC), shifting toward innovation-friendly but stability-conscious frameworks [7]. This coordinated strategy may help reduce redundant regulatory burdens and create a more predictable environment for financial institutions and market participants [4]. The move also coincides with the U.S. banking sector’s gradual adaptation to integrated regulatory frameworks, which could encourage the incorporation of stablecoins and digital assets into traditional finance in a more structured and routine manner [1].

By concluding the specialized oversight program, the Fed is reinforcing a supervisory model that is both cohesive and scalable, better suited to managing the evolving financial landscape. This shift is expected to support continued innovation in fintech and crypto, provided it operates within clear and stable regulatory parameters [6]. As the U.S. financial system continues to evolve, the Fed’s decision underscores a pivotal step in the mainstream integration of digital assets into the broader financial ecosystem [1].

Source:

[1] The National Law Review – [https://natlawreview.com/article/federal-reserve-ends-novel-activities-supervision-program-crypto-and-fintech](https://natlawreview.com/article/federal-reserve-ends-novel-activities-supervision-program-crypto-and-fintech)

[2] Mitrade – [https://www.mitrade.com/insights/news/live-news/article-3-1054613-20250820](https://www.mitrade.com/insights/news/live-news/article-3-1054613-20250820)

[4] AInvest – [https://www.ainvest.com/news/federal-oversight-clears-path-anchorage-crypto-dominance-2508/](https://www.ainvest.com/news/federal-oversight-clears-path-anchorage-crypto-dominance-2508/)

[7] AInvest – [https://www.ainvest.com/news/sec-shifts-crypto-oversight-innovation-driven-framework-genius-act-2508/](https://www.ainvest.com/news/sec-shifts-crypto-oversight-innovation-driven-framework-genius-act-2508/)

[6] JD Supra – [https://www.jdsupra.com/legalnews/troutman-pepper-locke-weekly-consumer-4777078/](https://www.jdsupra.com/legalnews/troutman-pepper-locke-weekly-consumer-4777078/)