The Federal Reserve Board announced on Friday that it will end its novel activities supervision program and shift back to monitoring banks’ novel activities through its regular supervisory process.
The program, which was initiated to oversee certain cryptocurrency and financial technology activities in banks, allowed the Board to gain a deeper understanding of these operations, associated risks, and how banks manage those risks. With this knowledge, the Board stated it is now prepared to integrate oversight of such activities into its standard procedures. The 2023 supervisory letter that established the program will be rescinded.
“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, the Board is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program,” according to a statement from the Federal Reserve Board.
