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6d ago

Fed Ends Specialized Crypto and Fintech Oversight, Returns to Standard Bank Supervision

Specialized supervision enriched the Fed’s understanding of digital asset risks, qualifying it to fold crypto and fintech oversight into its regular bank examinations.

Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
Fed scraps oversight program for banks with crypto and fintech exposure
U.s. fed officially scraps specialist group meant to oversee crypto issues
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Overview

  • On August 15, the Federal Reserve announced it would sunset its Novel Activities Supervision Program, rescind the 2023 supervisory letter and shift crypto and fintech reviews back into its routine supervisory process.
  • The two-year program, launched after the 2022–23 crypto market and bank failures, deepened the Fed’s expertise on digital asset risks and banks’ risk management practices.
  • This action completes a coordinated rollback by U.S. banking regulators following earlier FDIC and OCC withdrawals of joint guidance and pre-approval requirements for crypto-related services.
  • Banks will no longer need separate approvals for digital-asset and fintech activities but remain subject to existing safety-and-soundness, anti-money-laundering and custody standards.
  • The decision aligns with White House directives and pending congressional legislation aimed at normalizing banks’ participation in stablecoin and broader digital-asset markets.