The Federal Reserve in the U.S. announced the conclusion of its cryptocurrency oversight program established in 2023, returning to standard monitoring methods.
Closure of Oversight Program
On Friday, the Fed announced the end of its novel supervision program for crypto assets initiated in August 2023. The program was risk-focused and aimed at overseeing banks involved with crypto assets. The Fed has decided to integrate the knowledge gained about those risks back into standard supervisory processes.
Impact on Crypto Regulation
The termination of the program does not necessarily imply a reduction in oversight over banks dealing with crypto companies; U.S. government agencies have generally softened their approach to regulating digital assets. Since January, the Securities and Exchange Commission has dropped several investigations into crypto firms.
Political Climate at the Fed
The Fed's policy has become a subject of public discussion. U.S. President Donald Trump has publicly criticized the Fed's independence. In August 2023, Fed board member Adriana Kugler resigned, and Trump nominated a candidate to fill her role.
In conclusion, the Fed is opting for a more traditional route in overseeing bank operations involving crypto assets, which may influence the overall regulatory landscape for cryptocurrencies.
