The US Federal Reserve has announced the end of its special monitoring program for banks involved in crypto-related services established in 2023.
End of Special Monitoring Program
The US Federal Reserve has concluded its special monitoring program aimed at overseeing banks engaged in cryptocurrency services. The program, which was established in 2023, required banks to notify the Fed of their intent to custody digital assets, stablecoins, or tokenize assets. The Fed believes it now has a better understanding of the risks associated with crypto activities, allowing for the transition to standard banking oversight.
Changes for Banks and the Market
For American financial institutions, this decision alleviates administrative burdens and may accelerate the integration of crypto services. Banks will no longer have to follow a separate protocol but must still demonstrate their ability to manage risks in accordance with traditional standards. This easing may also appeal to new players who were previously deterred by cumbersome procedures.
Regulatory Prospects for Crypto Assets
While the Fed has loosened its grip, it does not surrender its oversight mission. Activities related to crypto, stablecoins, and tokenization will still be integrated into regular audits and inspections, with a focus on operational risks, cybersecurity, and compliance.
The conclusion of the Fed's special monitoring program may indicate more favorable conditions for banks engaged in cryptocurrency activities and suggests a shift in regulatory approach in the US.
