Fed Ends Special Crypto Oversight Amid Trump's Eased Regulations

The U.S. Federal Reserve has officially ended its specialized oversight program for cryptocurrency and fintech activities, signaling a broader shift in regulatory focus and approach under the Trump administration [1]. The program, known as the Novel Activities Supervision Program, was launched in August 2023 to impose additional scrutiny on banks engaging with digital assets and fintech operations [2]. In a recent notice, the Fed stated that the knowledge gained from the initiative would now be integrated into its standard bank supervision process, effectively returning oversight of crypto-related activities to routine regulatory practices [3].

The decision comes amid a series of regulatory adjustments aimed at easing the burden on financial institutions in the digital asset space. The Trump administration has taken a more lenient stance, as evidenced by the SEC’s decision to drop several investigations into cryptocurrency companies since January 2025 [4]. Additionally, the Treasury Department is exploring the possibility of establishing a national cryptocurrency reserve, further reflecting a policy environment more favorable to digital finance [5]. Analysts suggest that these moves indicate a broader strategy to reduce regulatory constraints and promote innovation in the fintech sector [6].

The termination of the Fed’s special oversight program has been interpreted as a response to the administration's executive order titled “Strengthening American Leadership in Digital Financial Technology,” issued earlier in 2025 [7]. This order aims to foster a more supportive environment for digital asset development and adoption. By moving away from the specialized program, the Fed is expected to provide greater flexibility for banks to engage with emerging technologies without additional regulatory hurdles [8].

Experts note that the Fed’s leadership and policy direction have long been politically sensitive. With the resignation of Board of Governors member Adriana Kugler in August and the appointment of Stephen Miran as interim successor, the administration appears to be reinforcing its influence over the institution [3]. Trump has also continued to publicly criticize Fed Chair Jerome Powell, whose term is set to expire in May 2026, and has pushed for lower interest rates [6].

Market participants have generally welcomed the move, viewing it as a step toward regulatory clarity and reduced uncertainty for banks and fintech firms. The shift is seen as a sign that crypto-related activities are being increasingly treated as part of the mainstream financial landscape.

Sources:

[1] Fed Ends Crypto and Fintech Oversight Program for Banks

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

[2] Federal Reserve shutters dedicated crypto oversight program

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

[3] Fed ends special crypto oversight program

https://coinedition.com/fed-ends-specialized-crypto-oversight-returns-to-standard-bank-supervision/

[4] President Trump Issues Executive Order on Fair Banking

https://www.fintechanddigitalassets.com/2025/08/president-trump-issues-executive-order-on-fair-banking/

[5] Fed Shuts Down Special Crypto Oversight, Returns to ...

https://coinpedia.org/news/crypto-news-fed-shuts-down-special-crypto-oversight-returns-to-normal-rules/

[6] Fed ends crypto-focused supervision, returns oversight to ...

https://www.mitrade.com/insights/news/live-news/article-3-1044291-20250816

[7] Digital Asset Regulatory Recommendations

https://www.americascreditunions.org/blogs/compliance/digital-asset-regulatory-recommendations

[8] Fed integrates crypto banking oversight into standard ...

https://www.bitget.com/news/detail/12560604914445