Fed ends crypto specialist group

The Fed ends a two year program that focused on banks' crypto ties and moves crypto oversight back into regular supervision.

U.S. Fed Officially Scraps Specialist Group Meant to Oversee Crypto Issues

The Federal Reserve on Friday shut down its Novel Activities Supervision Program, a two year effort aimed at watching banks' crypto ties. The Fed said the work will be folded into the normal supervisory process, and that it has strengthened its understanding of these activities and related risks. The change returns the focus to standard risk management practices and everyday bank supervision, rather than a separate crypto eye.

The move comes as the Fed and two other major U.S. regulators, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., have rolled back earlier crypto guidance in recent months. April saw the withdrawal of guidance requiring bank approvals before taking on new crypto activity. The broader trend, seen since the start of President Trump’s term, has included a shift toward less aggressive crypto constraints as regulators recalibrate how to balance innovation with safety. The Fed notes that the decision does not remove attention to novel activities, but places it within the normal oversight framework.

The decision reflects a preference for general risk management over bespoke crypto scrutiny. It signals a move toward consistency across banking supervision, which can simplify bank expectations but may leave some observers wary about the pace of upheaval in tech-enabled finance. As regulators align with a lighter touch, banks and crypto firms watch for gaps where rapid innovation could outrun old rules. The political backdrop could intensify scrutiny if lawmakers push back against easing crypto constraints, potentially shaping future policy directions. This shift also tests how quickly the system can adapt to new technologies without dedicated watchdogs.

Highlights

The coming months will show whether regular oversight can match the pace of crypto innovation.