Federal Reserve ends special program for crypto supervision of banks

The US Federal Reserve has ended the "Novel Activities Supervision Program," introduced in 2023. Going forward, activities such as crypto, stablecoins, and blockchain technologies will return to the regular supervisory framework - a key step toward normalizing digital asset oversight in the banking sector.

The Fed has discontinued its special program for monitoring banks in relation to crypto and fintech activities. Critical areas such as stablecoin services, tokenized products, and partnerships with fintech companies will now be handled through the standard supervisory process. The Fed justified the decision by citing an improved understanding of the risks and the banks' risk management practices.

Integration into the regular supervisory process

The program launched in 2023 was aimed at strengthening oversight of banks engaged in "novel activities" such as crypto services, stablecoin issuance, and blockchain partnerships. Now the Fed says it has sufficiently enhanced its ability to assess these risks.

Activities in this field will therefore no longer be monitored separately but instead reviewed under the conventional examination framework.

Consequences for banks and crypto integration

The elimination of the special program removes a significant hurdle for banks looking to enter crypto assets. Stablecoin issuance or crypto custody services are now easier to implement - without additional specialized supervision. The repeal of the earlier guidance requiring banks to seek prior approval for crypto activities also marks a clear shift toward regulatory flexibility.

The decision signals a broader regulatory reassessment of digital financial innovation - in line with similar relaxations by the OCC and FDIC. Banks are increasingly viewing digital asset services as a normal part of their business rather than an experimental special risk.

Banks such as JPMorgan and Wells Fargo, which in recent months worked closely with the Fed on pilot programs for crypto payments, interpret the end of special supervision as a sign of greater planning certainty. Goldman Sachs analysts see it as opening the way for new custody offerings that could be launched in the coming quarters. In particular, the integration of stablecoin services into payment systems is now expected as the next step.