Fed Ends Crypto Supervision Program, Returns to Normal – Is This a Genius Move or a Disaster?

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So, the Federal Reserve decided to wrap up its special crypto supervision program and go back to regular bank oversight. What could possibly go wrong?

The Federal Reserve Board just made a big decision. On August 15, 2025, they announced that they’re putting an end to this fancy program they started back in 2023 called the “novel activities supervision program.” Apparently, it was all about tracking how banks were handling crypto assets and that “distributed ledger technology” stuff-don’t ask me, I’m just the messenger. Anyway, the Fed is now saying, “Hey, let’s just do the same old thing and watch them like we watch all the other banks.” Brilliant, right?

Fed Cites Improved Understanding, Ends Targeted Crypto Banking Program

This project started in August 2023 to keep an eye on those banks offering crypto-related services, like deposits, payments, and lending to crypto and fintech companies. But, guess what? Now they’re saying they don’t need to “target” crypto anymore. They’ve got a better understanding of it now-well, thank goodness! So, instead of this super special program, they’ll just fold it into the regular ol’ oversight. Same surveillance, just less “special.” Oh, joy.

Apparently, the Fed now has a better grasp of the risks involved with crypto. Two years ago, they needed extra help to figure out how these banks were dealing with this newfangled technology. But now? No big deal, they’re just going back to their usual techniques, like they never missed a beat. Efficiency at its finest, right?

Related Reading: Treasury Secretary Bessent Calls For A 50 BPS Rate Cut In September: What Does This Mean For Crypto? | Live Bitcoin News

And if you think the Fed is the only one easing up, think again. The Office of the Comptroller of the Currency (OCC) has also been lightening up on crypto regulations. Apparently, they’re all just chilling now, accepting that crypto is here to stay. What could possibly go wrong?

Federal Reserve Shifts Strategy, Eases Crypto Supervision for Banks

So, what does this mean for banks? Well, the strict oversight had some banks spooked, making them hesitate to dive into the crypto pool. But with this new “relaxed” approach, they might be feeling a little more comfortable dipping their toes in. The Fed’s new strategy is basically a “we’re watching, but don’t worry too much” kind of deal. They’ll keep an eye on volatility and legal issues, just to make sure everything’s running smoothly. You know, business as usual.

But hold up-some critics aren’t thrilled. They’re like, “What about the wild unpredictability of crypto? Shouldn’t we have more regulation?” The Fed’s response? “Oh, we’ve got this. We’ll supervise it regularly like we always do.” Because that’s reassuring, right?

So, what’s the takeaway here? The Fed’s decision to shut down its crypto supervision program is a pretty big deal. They’re claiming it’s all about their “newfound knowledge” of the crypto world. But who knows, maybe this opens up a door for more crypto innovation in the banking world. Or maybe it’s a disaster waiting to happen. Only time will tell. But hey, the Fed’s watching it closely, so everything’s fine, right?

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2025-08-16 20:35