The Federal Reserve has ended a program that was made to monitor crypto banking, returning to its normal supervision process, following former President Donald Trump’s executive order to stop unfair banking practices.
In a press release, the U.S. Central Bank said it will sunset its novel activities supervision program. The Board noted it has gained a better understanding of crypto and fintech activities, risks, and bank management practices. The Federal Reserve will now integrate this knowledge into its standard monitoring processes.
The Board also confirmed it will rescind the 2023 supervisory letter that created the program. Officials said the letter had been a key part of enforcing Operation Chokepoint during the Biden administration. “This program has helped us understand crypto activities, and we are now ready to supervise them through normal processes,” the release said.
The decision comes after Trump signed an executive order that ended banking practices influenced by political, religious, or other ideological biases. The order specifically mentioned Operation Chokepoint and the pressure on banks to cut ties with crypto firms and related businesses. Banking regulators were instructed to stop any guidance used to carry out targeted actions against firms or individuals.
This is not the first guidance the Federal Reserve has released regarding crypto banking. Last month, the Fed, along with other regulators, said that banks are allowed to custody crypto assets. Officials clarified that the same rules that apply to other assets will also apply to crypto custody.
Notably, Industry experts seem to welcome this move, saying it is good for the growing crypto market. With crypto now included in regular supervision, banks and fintech firms can work under clearer and fairer rules, marking another step to support digital finance in the U.S.
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