Federal Reserve Ends Special Crypto Banking Oversight Program

Generated by AI AgentCoin World
Friday, Aug 15, 2025 2:36 pm ET1min read
BTC
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Aime RobotAime Summary

- The Federal Reserve ended its 2023 crypto banking oversight program, returning supervision to standard processes after assessing risks and fintech developments.

- The FDIC and OCC also relaxed crypto restrictions, allowing banks to custody and trade digital assets following revised regulatory approaches.

- Trump’s executive order targeting "unfair banking practices" influenced the shift, rejecting perceived anti-crypto policies like "Operation Chokepoint 2.0."

- Pro-crypto advocates praised the move, highlighting its potential to boost institutional Bitcoin adoption and create a balanced regulatory framework.

- The decision signals growing regulatory acceptance of crypto, aligning digital assets with traditional financial instruments under standard oversight.

The Federal Reserve has officially terminated its targeted supervisory program for banks engaged in cryptocurrency activities, marking a shift in the central bank’s regulatory strategy. The program, introduced in 2023, imposed heightened scrutiny on banks offering crypto-related services, with the aim of monitoring risks associated with blockchain technology and digital assets. The Fed has now stated that it will return oversight of these activities to its standard supervisory processes [1][2][3].

In a statement, the Federal Reserve emphasized that its decision followed a deepened understanding of cryptocurrency operations, risk management frameworks, and fintech developments since the program’s inception. The central bank noted that the knowledge gained would be integrated into broader regulatory practices. The 2023 supervisory letter that established the program is also being rescinded [2].

This move aligns with a broader regulatory shift toward crypto-friendly policies. The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have similarly removed restrictive guidelines that previously required banks to undergo additional scrutiny when engaging in crypto activities. The OCC, for instance, revised its stance in May to allow banks to buy, sell, and custody crypto assets on behalf of customers [2].

The decision follows an executive order issued by Donald Trump, which aimed to eliminate what were described as “unfair banking practices” and policies that allegedly pressured banks to disengage from the crypto industry. The order specifically referenced “Operation Chokepoint 2.0,” a term critics used to describe perceived regulatory bias against crypto firms [2].

Pro-crypto Senator Cynthia Lummis welcomed the move, calling it a significant step toward creating a more balanced regulatory environment for digital assets. She acknowledged that additional reforms are needed but highlighted the importance of this decision in advancing crypto adoption. Michael Saylor, founder of MicroStrategy, also expressed optimism, noting that the Fed’s decision could facilitate greater institutional interest in

Bitcoin
[2].

The termination of the Fed’s targeted program reflects a growing regulatory comfort with crypto activities and signals a move toward integrating digital assets into conventional financial systems. Banks will now be subject to standard oversight when offering crypto-related services, consistent with how traditional financial instruments are regulated [1][2][3].

Source: [1] Federal Reserve to end Biden-era oversight program for ... (https://seekingalpha.com/news/4486209-federal-reserve-to-end-biden-era-oversight-program-for-banks-crypto-activities)

[2] Federal Reserve to End Program That Targeted Crypto ... (https://coingape.com/federal-reserve-to-end-program-that-targeted-crypto-banking/)

[3] Federal Reserve drops program that increased banks ... (https://crypto.news/federal-reserve-drops-program-that-increased-banks-scrutiny-of-crypto/)