The Federal Reserve announced the closure of its Novel Activities Supervision Program, established in 2023 to scrutinize banks’ associations with cryptocurrencies.
Key Points:
- The program’s termination comes as the Federal Reserve has acquired sufficient knowledge over the past two years, thus integrating digital assets supervision back into routine oversight.
- A statement from the Fed emphasized a shift back to standard procedures for monitoring banks’ crypto activities.
Previously, under Vice Chairman Michael Barr, the Fed aimed to create special guidelines to track the banks’ ventures into the crypto realm. This decision aligns with ongoing trends among U.S. banking regulators to ease regulations surrounding digital assets, as institutional authorities have recently aimed to withdraw stringent controls.
The original premise of this specialized framework was strengthened following the failures of tech-related lenders in early 2023.
In its place, the Fed will rely on traditional supervisory mechanisms, capitalizing on its increased familiarity and improved risk management concerning virtual currencies.
