- Fed ends oversight program in merging crypto supervision.
- Normalizes bank regulations, reducing bespoke oversight.
- Potential positive perception on regulatory compliance risks.
The Federal Reserve has terminated its Novel Activities Supervision Program, initiated in 2023 to oversee banks’ crypto activities, as announced on August 15, 2025, by the Federal Reserve Board.
The move indicates the Fed’s confidence in integrating crypto risks into standard oversight, potentially granting banks more autonomy in managing crypto services, with effects anticipated in market compliance perceptions.
The Federal Reserve has concluded its Novel Activities Supervision Program, initially established in 2023. This initiative focused on overseeing banks’ crypto activities. The decision marks an essential regulatory shift by folding responsibilities into mainstream bank supervision.
The program was initiated under Vice Chairman Michael Barr, a key figure in the Fed’s supervision efforts. The integration of crypto activities into the standard process underscores a matured understanding of associated risks.
This policy change may affect U.S.-regulated banks by granting them greater autonomy in crypto services without additional bespoke oversight. It reflects a growing confidence in the banks’ risk management regarding fintech activities.
The Federal Reserve, citing matured expertise, aligns with similar moves by the OCC and FDIC to normalize crypto supervision within standard bank processes, hinting at a broader regulatory adjustment. As stated by the U.S. Federal Reserve Board:
“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, the Board is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program.” Source
While immediate effects on crypto markets or specific assets remain unclear, the adjustment could signal a normalization in the compliance landscape. The market may perceive this as a positive change in regulatory attitudes.
Historical trends suggest that reduced specialized oversight can lead to improved perceptions of compliance risks for assets like BTC and ETH. The integration into routine supervision is expected to align with traditional banking regulatory frameworks. For more perspectives, Jesse Hamilton has shared thoughts on these regulatory changes.
