- Federal Reserve ends special crypto oversight program initiated in 2023.
- Move follows Trump directive aiming for regulatory clarity.
- Potential increased bank involvement with crypto assets.
The Federal Reserve has officially discontinued its special crypto oversight program for banks, reverting to a standard supervisory approach after a directive from the Trump administration.
The change is significant for banks and fintechs, potentially reducing regulatory risks and encouraging more involvement in digital assets.
The Federal Reserve officially ends its special crypto oversight program for banks, initiated in 2023. The decision aligns with a Trump directive, focusing on reducing dedicated scrutiny on crypto and fintech activities.
This transition will lead to changes in how crypto activities are supervised by banks. The Federal Reserve’s guidance to banks regarding their crypto-asset activities is withdrawn, impacting USD-crypto interactions.
U.S. banks might see decreased compliance hurdles as a result. The change could potentially increase liquidity and bank involvement in the crypto industry, benefiting major digital assets.
The move implies lower regulatory risk, which could ease the operational challenges for banks and fintechs. This may encourage more robust integration and adoption of tokenized deposits and stablecoins.
The shift reflects broader regulatory adaptations. Further supervisory adjustments may unfold as the Fed resettles into traditional processes. This could impact the crypto market’s operational landscape significantly.
Historical trends suggest reduced regulatory hurdles often correlate with increased cryptocurrency market stability. As scrutiny declines, banks might engage more confidently with industry ventures, enhancing market liquidity and innovation across DeFi platforms.
The Board is rescinding its 2022 supervisory letter establishing an expectation that state member banks provide advance notification of planned or current crypto-asset activities… The Board will no longer expect banks to provide notification and will instead monitor banks’ crypto-asset activities through the normal supervisory process. – Federal Reserve Official Release, April 2025, Federal Reserve
