The Federal Reserve has concluded its supervisory program monitoring U.S. banks involved in cryptocurrency services. This decision means banks will no longer face heightened scrutiny for offering crypto custody or stablecoin services. Initially introduced to oversee risks associated with digital assets, the program had required banks to inform the Fed about their involvement in crypto. The Fed cited a strengthened understanding of these activities as a reason for rescinding the program, indicating that monitoring will revert to standard supervisory processes. This announcement follows previous steps taken by the Fed to limit banks' engagement with crypto services amid concerns over the industry's volatility, especially following the collapse of FTX in 2022 and the failures of various banks in 2023. Additionally, President Trump, under his new administration, signed an executive order to protect crypto initiatives from being denied banking services, contrasting the more restrictive approaches of prior policies. As regulators embrace a more favorable view towards the crypto industry, the landscape surrounding digital assets continues to evolve.

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