U.S. Federal Reserve Ends Novel Activities Supervision Program for Crypto
The Federal Reserve has ended its Novel Activities Supervision Program, which focused on monitoring banks' crypto activities. This decision returns oversight responsibilities to standard supervisory processes.
Key points include:
- The program was initiated under Vice Chairman Michael Barr but is now being phased out.
- In April, the Fed withdrew prior guidance requiring banks to seek approvals for new crypto activities.
- Other regulators, like the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., have aligned with this relaxed approach.
- The program aimed to assess risks from innovative technologies following failures of several crypto-related banks in 2023.
- Over two years, the Fed claims to have improved its understanding of associated risks and bank practices.
This shift reflects a broader trend among U.S. banking regulators to ease restrictions on digital assets amid complaints from the crypto industry about excessive scrutiny.