The Federal Reserve has discontinued a supervisory program designed to monitor U.S. banks involved in crypto services. This shift indicates that U.S. banks will no longer face increased scrutiny when offering services like crypto custody or stablecoin offerings. The Fed stated that it has strengthened its understanding of the risks associated with crypto activities since the program's inception. Consequently, these activities will now fall under the standard supervisory process rather than a specialized program. This decision follows recent changes in regulatory attitudes and is part of a broader trend led by new leadership under President Donald Trump, who has promoted a more favorable regulatory environment for the crypto industry. The Fed had previously enforced strict guidelines for banks engaging in crypto to mitigate risks. However, after assessing the landscape and the risks involved, it has opted for a less intensive supervisory approach. This move reflects a significant evolution in how the Federal Reserve will oversee sectors entangled with digital assets, especially following events like the 2022 collapse of FTX and various banking failures linked to the crypto industry.

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