The U.S. Federal Reserve has discontinued its supervisory program monitoring banks involved in cryptocurrency services, stating that it has gained sufficient understanding of the associated risks. Previously, banks involved in activities like crypto custody or stablecoin issuance had to adhere to stricter guidelines established in 2023. The Fed is now transitioning these activities to standard supervisory processes as part of its ongoing regulatory adjustments. This shift reflects a broader change in the approach to crypto regulation under the Trump administration, which aims to foster a more supportive environment for the digital asset industry. The Fed’s action follows heightened scrutiny of the crypto sector after notable events such as the collapse of FTX and the downfall of several smaller banks, which prompted concerns about the interplay between crypto and the traditional banking system. Overall, the Federal Reserve's move signifies a significant reduction in specialized regulatory oversight for banks engaging with cryptocurrencies.

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