The U.S. Federal Reserve has discontinued its supervisory program that monitored banks engaged in cryptocurrency services. This program was established to ensure banks complied with strict guidelines if they provided services like crypto custody or stablecoin offerings. The decision comes as the Fed claims to have developed a solid understanding of the risks associated with crypto activities since the program's inception in 2023. Going forward, banks will be monitored through the standard supervisory process without the heightened scrutiny that was previously enforced. The Fed's resolution follows a regulatory climate shift, especially after reports of significant issues faced by crypto-friendly institutions like Signature Bank. This change indicates a move towards increased acceptance of crypto activities within the banking sector as the regulatory landscape evolves under new leadership. The Fed feels that the risks tied to innovations like crypto can now be assessed through existing oversight mechanisms rather than specialized programs.

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