On August 15, 2025, the Federal Reserve ended its 'Novel Activities Supervision Program', reverting oversight to standard supervisory processes.
Disbandment of Specialized Oversight Program
The Federal Reserve announced the termination of its 'Novel Activities Supervision Program', which managed additional oversight measures for banks engaging with crypto activities. This program was initiated in 2023 under Vice Chairman Michael Barr, enforcing extra compliance steps for banks dealing with crypto custody, stablecoins, and tokenization.
Reduced Oversight Alters Compliance in Banking
The shift could lead to reduced regulatory oversight for U.S. banks that provide digital asset services, altering compliance protocols previously in place. This decision may affect financial institutions' roles in crypto custody and settlement, impacting assets like BTC, ETH, and stablecoins.
Regulatory Changes Reflect Dynamic Oversight
The Federal Reserve's action parallels past U.S. regulatory shifts regarding crypto activities, highlighting the dynamic nature of such oversight.
The Federal Reserve is moving towards more traditional oversight methods, potentially changing the landscape of financial institutions' engagement with digital assets, which may impact the market and its infrastructure.
