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Fed ends special crypto programs: banks breathe a sigh of relief!
The Fed is lifting the special program for crypto businesses, signaling integration and fewer hurdles for banks.
Fed ends special crypto programs: banks breathe a sigh of relief!
Today, August 16, 2025, the US Federal Reserve (Fed) discontinued the Novel Activities Supervision Program that was launched in 2023. This particular program was aimed at monitoring crypto and fintech activities within banks and provided an important tool for identifying risks in the banking system. Services such as crypto custody, stablecoin offerings as well as blockchain-based payment projects fell under the focus of the program. After almost two years of intensive observation, the Fed has now gained sufficient insight to integrate these activities into regular banking supervision.
By ending the special program, the Fed hopes to simplify the bureaucratic hurdles for banks. The new framework is intended to enable faster approval processes and provide more clarity regarding new crypto products. This could result in a significant increase in new crypto offerings on the US market. Another positive signal is that regulatory control remains in place and crypto offerings will continue to be subject to compliance and security tests in the future.
Cryptocurrencies on the rise
The termination of the Novel Activities Supervision Program is interpreted by observers as a sign that crypto services have increasingly entered the mainstream. Cryptocurrencies, which are digital or virtual currencies, are based on a distributed ledger technology called blockchain. These technologies use cryptography to secure transactions and are decentralized, meaning they operate independently of a central bank. Unlike traditional currencies, cryptocurrencies are not backed by physical goods or governments, but rather their value is regulated by the relationship between supply and demand.
Cryptocurrencies are not only used to purchase goods and services, but also enable money transfers and trading in markets. The most well-known digital currencies include Bitcoin, Ethereum, Litecoin, Ripple and Cronos. Many cryptocurrencies, like Bitcoin, are created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on the blockchain. This process is also known as Proof of Work (PoW), while the alternative, more energy efficient consensus mechanism Proof of Stake (PoS) is becoming increasingly popular, with network participants responsible for validating transactions.
As the Fed normalizes the regulation of crypto activities, it is becoming clear that integrating crypto offerings into the banking system poses both risks and opportunities. The coming months could be crucial in determining how the landscape of cryptocurrencies and their acceptance in the financial sector will evolve. In particular, the opportunities resulting from a less regulated environment could stimulate innovation in the area of Web3 applications and blockchain-based products.