Fed Ends Special Crypto Oversight Program, Integrates Monitoring into Standard Banking Supervision

The Federal Reserve is dismantling its Novel Activities Supervision Program, a dedicated initiative for monitoring banks' cryptocurrency and fintech engagements. Regulatory oversight will now fold back into standard supervisory channels, marking a shift toward normalized treatment of digital asset activities within traditional finance.

Established in 2023, the program targeted emerging risks from blockchain technology partnerships and crypto-related banking services. Its dissolution follows a broader trend of regulatory recalibration, including June's removal of subjective "reputational risk" assessments from examination manuals—a MOVE aligning the Fed with FDIC and OCC policy revisions.

This institutional pivot reflects growing comfort with crypto's role in financial ecosystems. By incorporating lessons learned rather than maintaining segregated scrutiny, regulators signal maturation in their approach to digital asset integration.