The Federal Reserve has concluded its supervisory program for U.S. banks engaged in crypto services, following its initiation in 2023. This decision reflects the Fed's enhanced understanding of the risks associated with cryptocurrencies. Under the previous program, banks were required to report their crypto engagements and adhere to stringent regulations. The new approach allows banks to operate under typical supervisory protocols rather than specialized scrutiny, thereby easing restrictions on activities like crypto custody and stablecoin offerings. This change comes amid a shifting regulatory landscape under the Trump administration, which has generally adopted a more accommodating stance towards the digital asset sector after a period of heightened scrutiny following significant failures in the crypto space, including the collapse of exchanges like FTX and issues faced by banks like Signature Bank. The Federal Reserve articulated that it would now monitor these activities through standard supervisory processes, signaling a shift in how U.S. banking regulations relate to the cryptocurrency industry.

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