The Federal Reserve has announced the termination of its Novel Activities Supervision Program, reverting oversight back to standard banking procedures.
End of Supervision Program
The Federal Reserve has ended its Novel Activities Supervision Program, which was established in 2023 to oversee cryptocurrency activities in the banking sector. This change signals a loosening of regulations and returns oversight to standard procedures.
New Opportunities for Banks
The shift back to ordinary oversight grants banks greater autonomy in determining their level of engagement with cryptocurrency. Banks can now make independent decisions regarding their participation in digital asset markets, relying on existing risk management frameworks.
Impact on the Cryptocurrency Market
As regulations have become more flexible, the cryptocurrency market may enter a new phase. Specifically, commentators suggest this change could encourage more banks to integrate digital assets into their service offerings. Currently, Bitcoin is valued at $117,450.98 with a market cap of $2.34 trillion.
The conclusion indicates that the Federal Reserve's relaxation of oversight may lead to increased bank participation in the cryptocurrency sector, potentially influencing the evolution of the financial industry in the future.
