TLDR
- Fed ends crypto bank oversight program, returns to standard supervision.
- U.S. Fed scraps crypto oversight for banks, shifts to normal risk checks.
- Federal Reserve winds down crypto bank program, adopts traditional review.
- Fed ends separate crypto bank supervision, folds oversight into main process.
- Crypto oversight for banks ends as Fed reverts to its usual monitoring model.
The Federal Reserve announced it is ending its crypto oversight program for banks, shifting back to its standard supervisory framework. This decision marks a key change in how the central bank manages crypto activities in the banking sector. The crypto oversight program for banks had operated since 2023 but now concludes after fulfilling its stated purpose.
Fed Moves Supervision of Crypto Back to Traditional Framework
The Federal Reserve launched the crypto oversight program for banks to monitor digital asset activities and manage emerging risks. Since then, the central bank has deepened its understanding of fintech operations, risk controls, and digital asset frameworks. Consequently, it now returns these responsibilities to its normal supervisory process.
The Federal Reserve announced it will terminate its Novel Activities Supervision Program and resume oversight of crypto and fintech-related bank activities through its standard supervisory process. The program, launched in 2023, is being retired as the Fed has gained sufficient…
— Wu Blockchain (@WuBlockchain) August 15, 2025
The Board rescinded its 2023 supervisory letter that initially created the program, officially sunsetting the initiative. Officials confirmed that the program helped develop insights into bank-level crypto and fintech activity. As a result, these insights will guide standard oversight moving forward.
This transition may streamline how regulators assess crypto activity within banks. Traditional supervisory tools will now manage oversight instead of the previously separate framework. Banks must continue to ensure compliance with risk expectations under the new structure.
Crypto Activities Face New Supervisory Path
The decision affects how the Fed manages banking organizations involved in blockchain, digital assets, and token-based infrastructure. The crypto oversight program for banks previously addressed technology partnerships and digital currency initiatives. Now, such activities will be assessed through the Fed’s broader supervisory process.
The Fed acknowledged that it no longer sees the need for a separate framework for novel technologies. Banking institutions will now report digital asset activities under regular oversight protocols, reflecting the Fed’s confidence in its risk assessment capabilities.
Digital asset-related bank operations, including custody and blockchain payments, will still be monitored. The only difference is that they will fall under traditional oversight mechanisms. This signals a normalized regulatory position on banking sector innovation.
Broader Context and Shift in U.S. Regulatory Posture
The Federal Reserve’s decision follows a broader shift in U.S. financial regulatory attitudes since early 2024. The crypto oversight program for banks formed part of earlier attempts to impose stronger controls on digital assets. Several federal agencies have since adjusted their approach to emerging technologies.
The Fed, FDIC, and OCC recently issued joint guidance on banks holding crypto on behalf of clients. In April, the Fed withdrew earlier restrictions that discouraged stablecoin-related activities. Each move highlights a shift from restrictive to more adaptive oversight strategies.
Agencies now support regulated innovation rather than impose barriers. The end of the crypto oversight program for banks aligns with this broader trend. The policy update may reduce regulatory friction for financial institutions pursuing fintech partnerships and blockchain ventures.
