Digital asset supervision to return under standard bank regulatory process
The U.S. Federal Reserve announced Friday that it will terminate its “novel activities supervision program” — a framework introduced in 2023 to oversee banks’ involvement with crypto assets and distributed ledger technology (DLT).
The program, launched in August 2023, specifically monitored banks offering deposits, payments, and lending services to crypto-related companies and fintechs. Going forward, those activities will be folded back into the Fed’s traditional supervisory process.
Fed says crypto oversight is now “integrated”
In its official notice, the Fed stated that the program had served its purpose by improving regulators’ understanding of crypto-related risks:
“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, the Board is integrating that knowledge back into the standard supervisory process.”
The decision also rescinds the Fed’s 2023 supervisory letter that formally created the program.
Shift in U.S. regulatory stance under Trump administration
The move is seen as part of a broader softening in U.S. crypto oversight under President Donald Trump’s administration. Since January, the Securities and Exchange Commission (SEC) has dropped several investigations and enforcement actions targeting crypto firms. Meanwhile, Treasury officials have signaled alignment with the White House’s push for a national crypto reserve.
Analysts note that while the program’s end does not eliminate regulatory oversight, it reflects a shift toward normalization of digital asset activities within traditional banking.
The change also comes at a politically sensitive time for the central bank. President Trump has repeatedly criticized Fed Chair Jerome Powell over interest rate policy, despite having nominated him in 2017. Powell’s chairmanship ends in May 2026, though his governorship extends to January 2028.
Separately, Adriana Kugler, a Fed governor and voting member of the FOMC, resigned on Aug. 8. Trump has nominated Stephen Miran, currently Chair of the Council of Economic Advisors, to temporarily fill her seat — with a permanent replacement expected early next year.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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