The Federal Reserve has announced the termination of a supervisory program that monitored U.S. banks engaging in cryptocurrency services. This decision indicates the Fed's increased understanding of the associated risks and bank management practices since it initiated the program in 2023. Going forward, activities such as crypto custody and stablecoin services will be overseen through normal supervisory processes rather than a specialized program with strict guidelines. The change follows a series of regulatory adjustments, including the withdrawal of previous limitations on banks offering crypto services. The Federal Reserve's approach reflects a broader shift towards a less restrictive regulatory environment for the digital asset industry under the Trump administration, which has emphasized fair banking practices for cryptocurrency initiatives. This move comes amid ongoing concerns about the risks posed by the crypto sector, particularly following failures in the industry, including the collapse of exchanges like FTX and the struggles faced by certain banks.

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