The Federal Reserve has discontinued its supervisory program aimed at monitoring banks engaged in cryptocurrency services. This decision means U.S. banks will now operate under a standard supervisory process without increased scrutiny for offering services like crypto custody or stablecoins. The Fed had previously imposed strict guidelines following heightened concerns about risks in the crypto sector, particularly after the collapse of FTX and issues with smaller banks like Signature Bank. The move aligns with a shift in regulatory stance under the current Trump administration, which seeks to relax restrictions that had been in place. The announcement emphasizes the Fed's developed understanding of the risks involved in crypto and associated fintech activities. This decision signals a potentially more favorable regulatory environment for banks involved in the digital asset space, as they will no longer face the unique monitoring previously imposed.

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