Fed ends special crypto oversight program
The post Fed ends special crypto oversight program appeared on BitcoinEthereumNews.com. Fed ends crypto-specific bank oversight, integrating activities into standard reviews. Regulators now believe existing frameworks can handle digital asset-related banking. Leadership shifts and political tensions add complexity to Fed’s policy direction. The Federal Reserve has announced it will phase out its specialized oversight framework for banks engaged in cryptocurrency and fintech ventures. Introduced in 2023, the program specifically targeted novel banking activities, such as providing payment services, deposit accounts, and loans to crypto-related businesses. Now, the Fed says these activities will return to the regular supervisory system. This move comes after regulators reported a better understanding of the risks, operations, and controls involved in such emerging financial services. The decision marks a notable shift in the central bank’s approach toward monitoring the intersection of banking and digital assets. Integration into Standard Oversight The novel activities supervision program was launched at a time when regulators were still navigating uncharted territory. It was designed to provide a risk-focused review of how banks managed exposure to crypto-asset companies and distributed ledger technologies. Since then, Fed officials have gathered substantial data and experience, enabling them to fold these oversight duties back into their mainstream supervisory process. The central bank will also rescind its original supervisory letter that outlined the program’s structure. Related: Two Fed Governors Break Ranks, Call for an Immediate Rate Cut This shift does not necessarily mean regulators are loosening their grip on the sector. Instead, it reflects a belief that existing oversight frameworks can now handle the complexity of these activities. Banks will still be required to demonstrate strong compliance practices, robust risk controls, and clear operational safeguards when dealing with digital asset clients. Changing Regulatory Climate The change also coincides with a broader, more measured tone in U.S. regulatory circles toward cryptocurrency. In recent months, several government agencies have signaled…
The post Fed ends special crypto oversight program appeared on BitcoinEthereumNews.com.
Fed ends crypto-specific bank oversight, integrating activities into standard reviews. Regulators now believe existing frameworks can handle digital asset-related banking. Leadership shifts and political tensions add complexity to Fed’s policy direction. The Federal Reserve has announced it will phase out its specialized oversight framework for banks engaged in cryptocurrency and fintech ventures. Introduced in 2023, the program specifically targeted novel banking activities, such as providing payment services, deposit accounts, and loans to crypto-related businesses. Now, the Fed says these activities will return to the regular supervisory system. This move comes after regulators reported a better understanding of the risks, operations, and controls involved in such emerging financial services. The decision marks a notable shift in the central bank’s approach toward monitoring the intersection of banking and digital assets. Integration into Standard Oversight The novel activities supervision program was launched at a time when regulators were still navigating uncharted territory. It was designed to provide a risk-focused review of how banks managed exposure to crypto-asset companies and distributed ledger technologies. Since then, Fed officials have gathered substantial data and experience, enabling them to fold these oversight duties back into their mainstream supervisory process. The central bank will also rescind its original supervisory letter that outlined the program’s structure. Related: Two Fed Governors Break Ranks, Call for an Immediate Rate Cut This shift does not necessarily mean regulators are loosening their grip on the sector. Instead, it reflects a belief that existing oversight frameworks can now handle the complexity of these activities. Banks will still be required to demonstrate strong compliance practices, robust risk controls, and clear operational safeguards when dealing with digital asset clients. Changing Regulatory Climate The change also coincides with a broader, more measured tone in U.S. regulatory circles toward cryptocurrency. In recent months, several government agencies have signaled…
What's Your Reaction?
