The U.S. Federal Reserve announced it will phase out a special oversight initiative launched in 2023 to closely monitor banks’ involvement with cryptocurrencies and distributed ledger technology.
In a statement released Friday, the Fed said the “novel activities supervision program,” first introduced in August 2023, will be discontinued. Going forward, banks’ digital asset activities will be reviewed under the Fed’s regular supervisory framework. The program had initially focused on risk management and oversight for institutions offering deposits, payment services, and lending to crypto-related firms and fintech companies.
“Since implementing the program, the Board has gained deeper insight into crypto and fintech operations, the risks involved, and how banks manage them,” the Fed noted. “That knowledge will now be fully incorporated into our standard supervisory practices, and the 2023 guidance establishing the program is being withdrawn.”
This shift doesn’t necessarily indicate a reduction in regulatory scrutiny of banks working with digital asset companies, but it does highlight a broader trend of a lighter-touch approach to crypto oversight under the Trump administration.
Since the start of the year, the Securities and Exchange Commission has closed multiple inquiries and enforcement cases against crypto firms, while Treasury officials have signaled alignment with the White House’s policy direction, which includes plans for a national crypto reserve.
Fed leadership under political spotlight
President Donald Trump has increasingly challenged the Federal Reserve’s independence, particularly criticizing Chair Jerome Powell — whom he appointed in 2017 — over interest rate policies. Powell’s tenure as chair runs through May 2026, though he remains a Fed governor until January 2028.
Meanwhile, Adriana Kugler stepped down from the Fed’s Board of Governors and the Federal Open Market Committee on August 8. To fill the vacancy, Trump tapped Stephen Miran, Chair of the Council of Economic Advisors, as an interim replacement. A permanent nominee is expected in January.
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