WASHINGTON: The US Federal Reserve announced on Thursday it will wind down its dedicated programme for supervising banks’ involvement in cryptocurrencies and fintech, folding oversight of such activities into its broader supervisory framework.
The “novel activities supervision programme” was launched in 2023 to assess risks tied to digital assets, blockchain services and partnerships between banks and technology firms. The Fed said it no longer sees the need for a separate structure as regulators have gained a better understanding of how institutions manage those risks.
From now on, oversight of crypto-related and fintech activities will be handled within the Fed’s standard supervisory channels, ensuring consistency across the banking system.
The move comes as US regulators continue to adjust their approach to emerging financial technologies. In June, the Fed also dropped “reputational risk” as a standalone category for bank supervision, a change that analysts said reflected efforts to streamline oversight.
“Integrating these activities into the routine supervisory process reflects both the maturation of the sector and the central bank’s confidence in banks’ risk management practices,” a Washington-based policy analyst noted.
The Fed’s decision underscores how regulators are recalibrating rules for digital finance — seeking to balance innovation with systemic stability at a time of growing public scrutiny over cryptocurrencies. — Reuters
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