Fed Ends Crypto Oversight Program, Eases Bank Supervision
The US Federal Reserve has ended its Novel Activities Supervision Program, which since 2023 enforced specialized crypto oversight of banks’ digital asset dealings. The Fed will now fold crypto supervision into its regular bank review processes. Under the shift, US banks may offer services such as dollar-backed stablecoins without seeking prior Fed approval. The decision follows a presidential executive order targeting unfair banking practices, including elements of Operation Chokepoint 2.0, and aims to level the playing field for digital asset providers. Regulators recently clarified that custodianship of crypto assets will adhere to the same rules governing other assets. Senator Cynthia Lummis lauded the move as a “big win” ending targeted crypto oversight. Industry figures, including Michael Saylor, echoed that the path is clear for Bitcoin and banking. The program’s closure is expected to reduce regulatory friction, expand institutional participation, and boost confidence in digital asset markets.
Bullish
The Fed’s decision to end specialized crypto oversight marks a shift toward mainstreaming digital asset supervision. By integrating crypto oversight into standard bank reviews and permitting services like stablecoin issuance without special approvals, the move lowers regulatory barriers and may attract greater institutional capital. Historically, targeted programs such as Operation Chokepoint dampened bank engagement with crypto firms. Removing this friction typically supports bullish momentum, as reduced scrutiny encourages product launches and custodial services. In the short term, traders may see positive market sentiment and increased liquidity. Long-term, broader adoption by banks could strengthen crypto infrastructure and price stability, underpinning further growth in the digital asset sector.