Background
The Fed’s special “novel activities supervision program” was created in 2023, during a period of heightened concern about banks’ involvement with crypto and fintech. It was designed to provide closer oversight of institutions experimenting with blockchain technology, stablecoins, or digital asset custody services.
Key Changes
By scrapping the separate program, the Fed is signaling that these activities are no longer considered entirely outside the scope of conventional risk management. Instead, banks engaged in crypto-related services will be supervised under the same principles that apply to other financial products and innovations.
“Integrating this oversight into our standard framework will ensure consistency while reducing regulatory fragmentation,” a Fed spokesperson stated.
Industry Impact
The decision has been welcomed by some banks, who view it as a sign of reduced stigma around crypto-related operations. Others warn, however, that the move may signal fewer dedicated resources for monitoring risks unique to digital assets, such as volatility and cybersecurity threats.
Still, the shift underscores a broader trend: cryptocurrencies and blockchain technologies are no longer treated as entirely novel experiments, but as part of the evolving landscape of mainstream finance.
