The U.S. Federal Reserve has discontinued a supervisory program that monitored banks engaged in cryptocurrency services. This program required banks to notify the Fed and observe strict guidelines when involved with crypto activities like custody and stablecoin services. The decision reflects the Fed's strengthened understanding of these activities and their associated risks, allowing banks to operate under standard supervisory processes rather than stringent regulations. This change follows a regulatory shift under the Trump administration, which has led to an easing of scrutiny towards the crypto industry. The original program was introduced in 2023 to mitigate risks related to banking activities with crypto firms, particularly in light of incidents involving significant exchanges. The Fed initially placed firms under unique supervision if they provided traditional banking services to crypto-related entities. Now, the Fed aims to adapt to a changing regulatory landscape, emphasizing that effective monitoring will continue through regular oversight. This latest move indicates a shift towards a more accommodating stance for financial institutions engaging in innovative technologies like digital assets.

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