The Federal Reserve has discontinued a supervisory program that monitored U.S. banks involved in cryptocurrency services, indicating a shift in its regulatory approach. This program initially required banks to notify the Fed and adhere to stringent guidelines when offering crypto services like custody and stablecoins. The Fed's board stated that it has gained sufficient insight into these activities and related risks to manage them through standard supervisory processes rather than the specialized program. This change follows a broader trend of loosening regulatory scrutiny on the crypto industry, particularly under the Trump administration, which has sought to protect digital asset operations from perceived unfair debanking initiatives. In recent years, increased supervision arose post the FTX collapse and the downfall of several crypto-friendly banks. The move signifies a substantial easing of constraints on banks offering crypto products and could encourage more engagement with the crypto market.

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