Fed Pulls the Plug on Novel Activities Supervision Program—What’s Next for Crypto?

The Federal Reserve just axed its Novel Activities Supervision Program—a move that’s either a bold step toward innovation or a reckless free pass for crypto’s wild west. Here’s why it matters.

No more hand-holding for fintech and blockchain experiments. The Fed’s decision to sunset the program signals a shift: innovate at your own risk, or as Wall Street likes to call it, 'business as usual.'

Regulators are stepping back—but is the industry ready to step up? With no guardrails, expect more 'disruption' (and a few spectacular crashes) in the DeFi space.

One thing’s certain: bankers will sleep fine tonight. They’ve got bailouts. You’ve got Bitcoin.

The Federal Reserve Board 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, related risks, and bank risk management practices.

As a result, the Board is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program.

SR 23-7: Creation of Novel Activities Supervision Program (withdrawn) (PDF)

Source: Federal Reserve