The Federal Reserve has concluded its supervisory program that monitored banks involved in cryptocurrency activities, stating it now possesses a sufficient understanding of the risks involved. As a result, U.S. banks engaging in crypto custody or stablecoin services will no longer face heightened scrutiny. This decision follows the Fed's earlier requirements for banks to follow strict protocols and notify the central bank when participating in crypto operations. The shift in supervision indicates a transition to normal regulatory processes for banks rather than a specialized program with enhanced compliance expectations. The Fed had previously initiated this supervisory initiative to mitigate risks arising from innovations in the financial sector and to enhance oversight as banks began offering services connected to cryptocurrencies. The move reflects a broader regulatory easing under recent leadership changes at the Federal Reserve, aligning with a more friendly stance towards the digital asset industry, which critics have argued was previously stifled by regulatory barriers.

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