FED Ends Special Crypto Banking Oversight Program in Major Industry Win

The Federal Reserve has terminated its dedicated crypto banking oversight program, marking a significant victory for digital asset firms. The now-defunct Novel Activities Supervision Program, launched in 2023, had subjected banks engaging in crypto-related activities to heightened scrutiny. These included digital asset custody, blockchain experiments, stablecoin issuance, and asset tokenization.

Regulators concluded that standard supervisory frameworks now suffice, citing improved understanding of crypto-related risks. The decision follows recent executive actions addressing alleged banking discrimination against crypto businesses under policies like Operation Chokepoint. With the program's dissolution, the Fed rescinded its 2023 supervisory letter that established the special oversight regime.

This regulatory shift comes as institutional crypto adoption accelerates, with traditional finance increasingly exploring blockchain-based solutions. The MOVE potentially reduces compliance burdens for banks servicing crypto clients, though they remain subject to conventional banking supervision.