Federal Reserve’s Crypto Program: A Hilarious Twist in Banking’s Digital Drama!

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In a move that could only be described as a theatrical curtain drop, the Federal Reserve has decided to shutter its crypto-focused oversight program, a veritable watchtower for the digital dealings of major banks. Yes, dear reader, the central bank has opted to return to its regular supervisory process, as if it were a nostalgic return to the comforting embrace of a well-worn novel, to monitor all things crypto-related. đź“š

Now, US banks can frolic freely in the fields of crypto services, such as dollar-backed stablecoins, without the pesky need for prior approvals. This delightful turn of events is expected to broaden institutional participation in the digital asset ecosystem, like a buffet where everyone suddenly remembers they’re on a diet. 🍽️

Federal Reserve Shuts Down Crypto Oversight Program

On a fateful Friday, the United States Federal Reserve announced the closure of its “Novel Activities Supervision Program,” a title that sounds more like a quirky indie film than a serious banking initiative. This program, which had been keeping a watchful eye on banks dabbling in crypto assets, blockchain experiments, and tech-heavy partnerships, has now been relegated to the annals of history. Established in 2023, it was the Fed’s attempt to track “novel activities” within banks, including crypto custody and blockchain-based lending. Alas, all good things must come to an end, much like a summer romance. 🌞

Easing Of Crypto Scrutiny

The Federal Reserve, in its infinite wisdom, proclaimed that since the inception of its crypto supervision program, it has gained a profound understanding of crypto activities, the risks they entail, and the bank risk management practices that accompany them. With this newfound enlightenment, the Board has decided to integrate the supervision of crypto-related activities into its standard supervisory process, as if it were a chef adding a secret ingredient to a beloved recipe. 🍲 The Board also plans to rescind its 2023 supervisory letter, which birthed this program, a move believed to be a part of the SEC’s “Operation Chokepoint” under the Biden administration. Talk about a plot twist! 🎭

In a delightful coincidence, the shuttering of the program follows President Donald Trump’s executive order to end unfair banking practices based on religion, politics, and other ideologies. The order also took a jab at Operation Chokepoint, highlighting how the Federal Reserve allegedly coerced banks into severing ties with prominent crypto firms. But fear not! The Federal Reserve, alongside other banking regulators, has recently given banks the green light to custody crypto assets, clarifying that the same rules governing other assets will now apply to crypto. It’s like saying, “You can play, but only if you follow the rules!” 🎉

A Big Win For The Crypto Industry

Senator Cynthia Lummis, in a moment of unrestrained enthusiasm, declared the Federal Reserve’s decision a “big win” for the crypto ecosystem, effectively putting an end to Operation Chokepoint 2.0. She noted that this decision halts the targeted supervision of crypto banking activities, as if she were announcing the end of a particularly tedious school year. 📅

“Big win for putting an end to Operation Chokepoint 2.0. The Fed announced it is killing the targeted supervision of digital asset banking activities. There’s still more to do, but this is real progress toward a level playing field for crypto.”

However, she did concede that there was still more to be done, but added that this decision was a significant step towards creating a level playing field for crypto. Strategy co-founder Michael Saylor chimed in, stating that the “road is now clear for Bitcoin and banking.” Meanwhile, crypto journalist Eleanor Terrett noted that the Novel Activities Supervision Program was a major catalyst for Operation Chokepoint 2.0, as if it were the villain in a gripping thriller. 📖

“The novel activities supervision program was a major catalyst for Operation Chokepoint 2.0, one banking lawyer told me. While the Fed has yet to rescind all of its anti-crypto guidance from the Biden era, this is another piece of the puzzle.”

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2025-08-16 18:14