Breaking: Fed Drops Crypto Oversight – Back to Business as Usual for Digital Assets

The Federal Reserve just pulled the plug on its special crypto monitoring program—letting digital currencies slip back into the regulatory gray zone. Here's what it means for your portfolio.

No More Kid Gloves

The Fed's abrupt U-turn scraps tailored oversight, forcing crypto to play by traditional finance rules. Market reacts with a shrug—because when has inconsistency ever rattled crypto traders?

Deja Vu for Wall Street

Banks get another shot at applying 20th-century frameworks to 21st-century assets. Spoiler: It'll work as well as fax machines in a Zoom meeting.

What's Next?

With the Fed stepping back, expect states and other agencies to rush in. The regulatory vacuum won't last—nature (and bureaucrats) abhor empty spreadsheets.

One thing's certain: The crypto rollercoaster just got its safety check waived. Buckle up.

The U.S. Federal Reserve has announced it will shut down its Novel Activities Supervision Program, a framework created in 2023 to monitor banks involved in crypto, blockchain, and fintech partnerships.

The program was launched to give the Fed a closer look at new and complex banking activities, including cryptocurrency custody, stablecoin projects, tokenized assets, and partnerships between banks and technology companies. It also tracked banks that provided large amounts of traditional banking services to crypto firms and fintech startups.

The Federal Reserve announced it will terminate its Novel Activities Supervision Program and resume oversight of crypto and fintech-related bank activities through its standard supervisory process. The program, launched in 2023, is being retired as the Fed has gained sufficient…

According to the Fed, the program has now served its purpose. Regulators say they have gained a better understanding of the risks, controls, and management practices involved in these activities. As a result, crypto- and fintech-related banking operations will now return to the Fed’s standard 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, related risks, and bank risk management practices,” the official announcement read.

The decision could ease regulatory pressure on banks working with digital assets and innovative financial technology. Analysts believe this could encourage more partnerships and development in areas such as blockchain-based payments and tokenization.

However, there is also a warning that general oversight may not MOVE as quickly as the fast-changing world of decentralized finance (DeFi), meaning risk monitoring will remain a challenge.

For now, social media reaction has been quiet, with little noticeable change in sentiment toward Bitcoin or the wider crypto market. But if banks feel more confident under normal supervision, the move could eventually bring more institutional money and innovation into the digital asset space.