Business & Economics
Fed Sunsets 2023 Crypto-Focused “Novel Activities” Bank Oversight Program
On 15 Aug 2025 the Federal Reserve rescinded its 2023 supervisory letter and folded the special monitoring of banks’ crypto and fintech exposures back into its routine examination process.
Focusing Facts
- The Novel Activities Supervision Program, created 8 Aug 2023 after the collapses of Silicon Valley Bank, Silvergate, and Signature, formally ended 15 Aug 2025.
- Its termination eliminates the stand-alone requirement that banks seek Fed pre-approval before launching services such as stablecoin custody, tokenized deposits, or crypto lending.
- The move follows April–June 2025 actions by the OCC and FDIC that repealed comparable crypto guidance, marking a coordinated regulatory shift.
Context
Ad-hoc regulatory task forces often appear after shocks—think the OCC’s 1994 “Derivatives SWAT team” post-Orange County—only to be absorbed once the novelty fades. The Fed’s rollback fits that century-long oscillation: crisis-driven oversight (Glass-Steagall 1933, Dodd-Frank 2010) gradually relaxes under economic and political pressure. By declaring crypto risks now manageable within ordinary exams, the Fed both normalizes digital assets and nods to a Trump administration narrative that extra scrutiny amounted to an “Operation Chokepoint 2.0.” The step may catalyze mainstream bank adoption of tokenized finance, but history warns that loosening bespoke guardrails—1999’s Gramm-Leach-Bliley being the oft-cited example—can sow systemic fragilities that surface a decade later. Whether this 2025 pivot empowers balanced innovation or plants seeds for the next liquidity crunch will matter long after today’s cryptocurrencies evolve into whatever form money takes in 2125.
Perspectives
Federal Reserve officials
Board press release — Ending the dedicated “novel activities” program is simply the next step now that supervisors have built enough expertise, so the same risks can be handled inside the routine examination process. The statement seeks to reassure markets and lawmakers that oversight is not weakening, reflecting the Fed’s incentive to defend its supervisory credibility after earlier banking failures.
Mainstream financial and business press
e.g., Quartz, Economic Times — The Fed is folding its special crypto-monitoring unit back into normal supervision because regulators now better understand digital-asset risks. Coverage largely echoes the central bank’s framing without probing whether the move reduces scrutiny, favoring a technocratic narrative that maintains reader trust in established regulators.
Crypto-industry outlets
e.g., CoinDesk, Cointelegraph, Coingape, Decrypt, CryptoSlate, Crypto Briefing — Sunsetting the program marks a clear loosening of ‘Operation Chokepoint-style’ pressure and a political win for the pro-crypto Trump administration, signalling friendlier conditions for banks to serve digital-asset firms. Stories emphasize victory and regulatory retreat, downplaying ongoing prudential requirements and tying the shift to partisan politics, reflecting outlets’ commercial stake in portraying a bullish policy climate.