Federal Reserve Ends Crypto Bank Supervision Program
- End of Federal Reserve’s crypto supervision program announced.
- Integration of knowledge into standard processes.
- Potential increase in institutional crypto involvement.
The US Federal Reserve shuttered its crypto bank supervision program on August 15, 2025, moving oversight back into its standard regulatory framework, affecting crypto-related bank activities nationwide.
This regulatory adjustment may lead to increased institutional engagement in crypto markets, potentially enhancing fund flows and easing bank participation in digital assets.
The US Federal Reserve announced on August 15, 2025, the cessation of its crypto bank supervision program, moving related activities back to standard oversight.
The decision is expected to streamline regulatory processes for banks involved in crypto, potentially increasing institutional funding in this sector.
Fed Halts ‘Novel Activities Supervision’ Program
The Federal Reserve ended its crypto bank supervision program, known as “Novel Activities Supervision.” Initiated in August 2023 under Michael Barr, it focused on digital asset oversight. The Board of Governors’ recent statement notes that the board is integrating knowledge and supervision of these activities back into the standard process.
The program’s discontinuation under Chair Jerome Powell and Vice Chair Michelle Bowman shifts crypto oversight into the Fed’s standard framework, as per official statements.
Potential Boost in Institutional Crypto Adoption
The shift may lead to faster institutional adoption of crypto, as banks face less regulatory scrutiny. Market expert MartyParty labeled the move as ending the perceived “operation ‘Choke Point.'” The move is seen as the definitive end of efforts to debank the crypto industry.
This regulatory change could facilitate greater institutional crypto involvement, with banks like Morgan Stanley expressing interest. Stablecoins, among other digital assets, may see increased adoption.
Regulatory Rollback Mirrors April 2025 Changes
The cessation resembles the April 2025 rescinding of prior crypto regulations by the Fed. Historically, lessening regulatory burdens have led to short-term positive market effects.
Data suggest improved liquidity for major crypto assets following regulatory relaxation. Expert opinions predict enhanced DeFi integrations and potential market expansion.
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