The Federal Reserve took another step in easing crypto regulations by discontinuing a two-year-old program designed to oversee banks’ involvement with digital assets. This move means the responsibility of monitoring banks’ crypto activities will now be integrated back into the Fed’s routine supervisory efforts.
The Novel Activities Supervision Program was initially launched during Vice Chairman Michael Barr’s tenure, under the supervision of then-President Joe Biden. The decision to wind down this program was announced in a statement released by the Fed on Friday, emphasizing a return to standard supervisory procedures.
Following a broader industry trend, the Fed, along with other regulatory bodies, has been scaling back on stringent oversight of digital assets since the second term of President Donald Trump. In a similar vein, the Federal Reserve recently rescinded its previous guidance requiring banks to seek approval from government regulators before engaging in crypto-related activities.
The program’s inception was driven by the need for specialized knowledge to assess potential risks stemming from new technologies within the banking sector. However, after two years of implementation, the Fed has expressed confidence in its understanding of these activities and associated risks, leading to a decision to incorporate this oversight back into its standard processes.
Amidst industry challenges and complaints of restrictive measures from government bodies, the Fed, aligning with the OCC and FDIC, is moving towards a more lenient approach to crypto regulations. This shift reflects a broader trend towards accommodating digital asset firms within the traditional banking framework.
Discover More: Federal Reserve Joins OCC and FDIC in Easing Crypto Regulations for U.S. Banks
