The Federal Reserve has discontinued a supervisory program that monitored U.S. banks engaged in cryptocurrency services. This policy shift indicates that banks will no longer face heightened scrutiny for offering crypto custody and stablecoin services. The Fed initially imposed strict guidelines in 2023 that required banks involved in crypto activities to inform the Fed and comply with rigorous oversight due to the associated risks. The change comes as part of a broader reassessment of the regulatory framework under the Trump administration, which has shown a friendlier stance towards the crypto industry following previous restrictions under Biden. The Fed stated that its understanding of crypto activities and related risks has evolved, enabling a transition to regular supervisory processes. This move follows earlier rescindments of supervisory letters that limited banks' abilities to provide crypto services, as the regulatory environment adjusts to the growing integration of digital assets within the financial system.

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