The Federal Reserve has concluded its supervisory program that monitored U.S. banks engaged in cryptocurrency services, stating that it has now improved its understanding of the related risks and management practices. The end of the program means banks will no longer face increased scrutiny for providing services such as crypto custody or stablecoin offerings. This decision follows a trend of regulatory change under the current administration, which has shifted from stricter oversight previously established due to several high-profile failures in the crypto space. The shift in policy indicates a move towards integrating crypto activities into the regular supervisory framework rather than under a specialized program. This marks a significant change in the regulatory approach to digital assets as U.S. regulators adapt to the evolving landscape of the cryptocurrency industry, especially following incidents such as the collapse of FTX. Additionally, the Fed had stated the need for careful monitoring of banks contributing to crypto-related activities. This regulatory evolution indicates a shift towards a more accommodating stance towards the crypto sector, aiming to foster innovation while managing associated risks.

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