The Federal Reserve has terminated its specialized supervisory program that monitored U.S. banks offering crypto services. This decision reflects the Fed's growing understanding of the risks associated with cryptocurrencies. Previously, banks engaged in activities such as crypto custody and stablecoin services faced heightened scrutiny under the supervisory program initiated in 2023. The Fed stated that these 'novel' activities will now be overseen through standard supervisory processes rather than a separate program with stricter guidelines. The change comes amid a broader shift in the regulatory approach towards cryptocurrencies in the U.S., particularly following leadership changes under President Trump, who has fostered a more amicable environment for the digital asset sector. The withdrawal of specialized oversight aims to streamline bank operations involving crypto without compromising risk management, following past concerns related to high-profile collapses in the crypto space.

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