Shamii

08/19 02:42

The U.S. Federal Reserve has closed its cryptocurr

The U.S. Federal Reserve has closed its cryptocurrency-focused supervisory program, which monitored cryptocurrency transactions at major banks. The Fed will resume its regular supervisory process, monitoring all cryptocurrency-related activities.

U.S. banks can now offer cryptocurrency services, such as dollar-backed stablecoins, without prior approval. This move is expected to expand institutional participation in the digital asset ecosystem.

Federal Reserve Closes Cryptocurrency Supervisory Program

The U.S. Federal Reserve has closed a program that monitored banks' cryptocurrency activities. The decision was announced on Friday, with the Fed stating it would shut down its "Innovative Activities Supervisory Program." The program was designed to supervise banks involved in cryptocurrency assets, blockchain experiments, and technology-intensive collaborations. The Innovative Activities Supervisory Program, which had been in existence since 2023, helped the Fed track "innovative activities" within banks under its supervision. This included cryptocurrency custody, cryptocurrency-backed lending, blockchain-based lending, and partnerships with technology companies to provide banking services.

Easing Cryptocurrency Scrutiny

The Federal Reserve stated that since the launch of its cryptocurrency supervisory program, it has enhanced its understanding of cryptocurrency activities, associated risks, and banks' risk management practices. As a result, the Fed plans to incorporate the regulation of cryptocurrency-related activities into its standard supervisory process.  The Federal Reserve Board also plans to rescind its 2023 supervisory letter that prompted the program's creation. The program is believed to be one of the ways the U.S. Securities and Exchange Commission (SEC) will enforce Operation Chokepoint under the Biden administration.

The program's termination follows President Donald Trump's executive order ending unfair banking practices based on religion, politics, and other ideologies. The order also referenced Operation Chokepoint and noted how the Federal Reserve forced banks to sever ties with prominent cryptocurrency companies and entities. The Fed, along with other banking regulators, recently approved banks to custody crypto assets. Regulators clarified that rules applicable to custody of other assets also apply to crypto assets.

A Major Victory for the Crypto Industry

Senator Cynthia Lummis called the Fed's decision a "major victory" for the crypto ecosystem, marking the end of Operation Chokepoint 2.0. She noted that the Fed's decision effectively halts targeted regulation of crypto banking activities.

 "The end of Operation Choke Point 2.0 is a major victory. The Fed announced it will end its targeted regulation of digital asset banking activities. While there's still work to do, this is a real step toward leveling the playing field for the crypto industry."

While she acknowledged that more work remains, she added that the decision is a big step toward leveling the playing field for the crypto industry. Strategy co-founder Michael Saylor also weighed in, stating that "the path is now clear for Bitcoin and banking." Crypto journalist Eleanor Terrett said the Novel Activity Supervision Program was the primary catalyst for Operation Choke Point 2.0.

A banking lawyer told me, "The Novel Activity Supervision Program was the primary catalyst for Operation Choke Point 2.0." While the Fed hasn't rescinded all of its Biden-era anti-cryptocurrency guidance, it adds another layer to the puzzle.

#Check In to Win a 20g Gold Bar#SNEK is listed on HTX, what do you think?#ETH price breaks through $4,600, buy or sell?#Buy Bitcoin’s dip,’ says Eric Trump#Whose “child” is ES — Solana or Ethereum?

1Share