US Fed to end oversight program for banks’ crypto activities

The Federal Reserve said it would sunset a program specifically to monitor banks’ digital assets activities and would integrate them back into its “standard supervisory process.”

The Federal Reserve Board said that it would end a “novel activities supervision program” set up in 2023 to supervise certain activities related to crypto assets and distributed ledger technology.

In a Friday notice, the Fed said it will sunset the program created in August 2023 and return to “monitoring banks’ novel activities through the normal supervisory process.” The 2023 program said it would be “risk-focused” and include supervision of banks providing “deposits, payments, and lending to crypto-asset-related entities and fintechs.”

“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,” said the Fed. “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.”

Read more