The Federal Reserve has terminated its supervisory program that monitored U.S. banks offering crypto services, stating it has strengthened its understanding of related risks. This change means U.S. banks will no longer face heightened scrutiny for activities like crypto custody or stablecoin services. The Fed had previously mandated that banks involved in crypto notify the central bank and adhere to strict guidelines. The ending of this program signifies a shift in the regulatory landscape as the Fed now plans to oversee these activities through regular supervisory processes. The decision follows earlier withdrawals of supervisory letters that restricted U.S. banks' engagement with the crypto sector, which regulators became wary of after incidents like the collapse of the FTX exchange and failures of several banks linked to the crypto market. The move also coincides with a broader trend of relaxed restrictions on the digital asset industry under the current administration, aiming to foster growth in the sector that was previously hindered by a more stringent regulatory approach.

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