Fed Drops the Hammer: Banks Get Green Light to Ease Up on Crypto Surveillance

The Federal Reserve just handed Wall Street a get-out-of-jail-free card—banks can now breathe easier on crypto oversight. In a move that’ll either spark innovation or send regulators into apoplexy, the Fed’s loosening its grip.

Less red tape, more risk?

Gone are the days of banks sweating every Satoshi. The new policy scraps burdensome monitoring requirements—freeing up institutions to dive deeper into digital assets without Big Brother watching every transaction. Critics say it’s a reckless gamble; crypto bulls call it long-overdue deregulation.

The fine print (or lack thereof)

Details are sparse, but insiders hint at relaxed reporting rules for stablecoin reserves and Bitcoin custody. One anonymous Fed official shrugged: ‘We’re tired of playing whack-a-mole with decentralized tech.’ Meanwhile, traditional finance dinosaurs are scrambling to update compliance playbooks—assuming they can find them in their 1990s-era filing cabinets.

The bottom line

Whether this triggers a institutional crypto gold rush or becomes a case study in ‘regulatory failure’ depends on who you ask. But hey—at least banks can finally stop pretending they understand how blockchain works.

Federal Reserve’s New Crypto Guidelines

The Federal Reserve has been the target of ire from much of the crypto industry over recent months, with its Chair Jerome Powell staunchly refusing to lower interest rates. This has prompted a storm of criticism led by President Trump, but it’s not all bad. Just today, the Fed announced that it was loosening its own crypto regulations:

“The Federal Reserve Board on Friday announced that it will sunset its novel activities supervision program and return to monitoring banks’ novel activities through the normal supervisory process. Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities,” it claimed.

Since the Fed has this increased understanding of crypto, it claims, it’ll sunset this program. This mirrors recent developments in Trump’s war on crypto enforcement, as several executive orders sought to curtail unfair debanking practices.

By refusing to monitor banks’ interactions with crypto, the Federal Reserve’s decision is very in line with these orders. It’s unclear how this new situation will play out in the markets, but it seems highly bullish.