The Federal Reserve announced it will end a program initiated in 2023 aimed at supervising banks' activities regarding digital assets and will reintegrate those activities into its standard supervisory process. This 'novel activities supervision program,' created to specifically monitor banks' involvement with cryptocurrencies and fintech, was established to ensure risk management in areas like deposits, payments, and lending related to crypto entities. The Fed noted that, through this program, it has gained a better understanding of the associated risks and management practices, leading to the decision to return these activities to the regular supervisory framework. The agency’s move suggests a less stringent approach to regulating banks' engagements with the crypto sector. This softening aligns with other federal agencies that have reduced enforcement actions in the crypto space under the current administration. The continuation of oversight in some form remains, but it reflects a shift in how these activities will be monitored.

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