Fed Scraps Dedicated Crypto Supervision Program, Shifts to Traditional Banking Oversight

The Federal Reserve has discontinued its specialized 'novel activities' supervision program for banks engaging with cryptocurrencies and fintech. The initiative, launched in 2023 to monitor emerging risks in digital assets, will now be absorbed into the central bank's conventional regulatory framework.

This shift aligns with broader efforts to position the U.S. as a leader in crypto innovation. Market observers view the move as signaling the end of so-called 'Operation Choke Point'—alleged regulatory efforts to restrict banking access for crypto firms.

The Fed cited improved understanding of crypto-related risks and banks' ability to manage them as justification for the change. The decision comes amid growing institutional adoption of digital assets and evolving regulatory clarity under new frameworks.