The Federal Reserve of the United States has announced the end of its crypto bank supervision program, which may have a significant impact on the cryptocurrency market.
End of Crypto Bank Supervision Program
On August 15, 2025, the Federal Reserve discontinued its crypto bank supervision program, shifting oversight of crypto-related activities back to standard regulatory frameworks. This program, known as 'Novel Activities Supervision', was launched in August 2023 under Michael Barr.
Impact on Institutional Crypto Engagement
The discontinuation may lead to increased institutional participation in the crypto market, as banks will face less regulatory scrutiny. Market expert MartyParty described this end as the conclusion of 'Operation Choke Point', signaling a halt to efforts to debank the crypto industry. This regulatory change could facilitate greater institutional involvement in cryptocurrency, with firms like Morgan Stanley expressing interest.
Historical Context and Regulatory Changes
This cessation mirrors the prior rescinding of crypto regulations in April 2025. Historically, reducing regulatory burdens has led to short-term positive market outcomes. Data indicates improved liquidity for major crypto assets following regulatory relaxation.
The Federal Reserve's termination of the crypto bank supervision program could significantly alter the dynamics of the cryptocurrency market, fostering greater participation from institutional investors.
