The Federal Reserve has announced the termination of its supervisory program that monitored U.S. banks engaged in crypto services. This decision reflects the Fed's increased understanding of the associated risks and bank management practices since the program's initiation. Moving forward, banks offering services like crypto custody or stablecoin handling will no longer face heightened scrutiny and will be monitored through standard supervisory processes. The Fed previously required banks to report and comply with strict guidelines under this program, which began in 2023. The change follows a trend of reduced regulatory pressure on banks involved in crypto, especially after the failures of certain banks and the collapse of the FTX exchange in 2022, which prompted increased caution among regulators. The Fed's announcement aligns with recent initiatives from the Trump administration, which aims to promote a more favorable environment for the digital asset industry, including an executive order to prevent what is perceived as unfair debanking of crypto entities. This move signals a shift in regulatory attitudes towards the cryptocurrency sector in the U.S.

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