Fed Ends Extra Crypto Oversight as U.S. Eases Banking Rules

In a major policy shift, the Federal Reserve announced it will end its “novel activities” oversight program, launched in 2023 to monitor banks engaging with crypto and fintech. This marks a return to normal supervision, as the Fed claims it now understands the risks involved.

The program’s rollback comes with the rescinding of its 2023 supervisory letter, allowing banks to re-engage with crypto under standard rules.

Crypto advocates like Senator Cynthia Lummis praised the move, calling it a win against “Operation Chokepoint 2.0”, which allegedly aimed to cut crypto firms off from banking. Lummis stated, “There’s still more to do, but this is real progress.”

Michael Saylor hailed the shift as opening the path for Bitcoin and banking to coexist. Regulatory expert Eleanor Terrett emphasized the significance, noting the Fed’s supervision had fueled prior banking barriers against crypto.

The change is part of a broader shift under the Trump administration, which has included:

• Scrapping anti-crypto banking guidance

• Removing “reputational risk” rules

• Banning politically motivated debanking

• Promoting integration of digital assets through policies like the Genius Act

This signals that U.S. financial leadership is warming up to crypto, encouraging banks and innovators to re-enter the space.