The Federal Reserve has ended a supervisory program that scrutinized U.S. banks engaged in crypto services. This decision means banks will no longer face increased scrutiny over activities like crypto custody and stablecoin services. The Fed stated that they have strengthened their understanding of these activities and related risks since the program's initiation. Notably, the program was created to oversee 'novel' activities such as crypto asset custody, but it will now be monitored through standard supervisory processes. This move comes amidst changes in the regulatory landscape under President Trump's administration, which has adopted a more favorable stance toward the crypto industry. The regulatory environment shifted significantly after high-profile failures in the crypto sector, leading to the initial establishment of the supervisory program in response to the perceived risks of innovation. As such, U.S. banks previously subject to unique monitoring will now operate under general regulatory frameworks for crypto-related activities.

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