The Central Bank of the United States has terminated the program monitoring new activities related to cryptocurrencies and financial technology.

The monitoring program initiated in 2023 to track complex banking activities in the cryptocurrency, blockchain, and fintech sectors will now be transitioned to the Fed's standard monitoring process.

MAIN CONTENT

  • The Fed's Novel Activities Supervision program will end, transitioning to the standard monitoring process.

  • The Fed has reinforced understanding of risks and governance in cryptocurrency and fintech activities at banks.

  • The termination of the program could reduce regulatory pressure, promoting collaboration and innovation in blockchain and tokenization.

What is the Novel Activities Supervision program and what are its objectives?

The program was initiated by the Fed in 2023 to closely monitor new banking activities, particularly those related to cryptocurrencies, stablecoins, and fintech collaboration.

This is a specialized monitoring framework to help the Fed gain deeper insights into activities such as cryptocurrency custody, asset tokenization development, and projects linking banks with financial technology. The integration of observations of banks providing significant services to cryptocurrency companies is also emphasized for better risk management.

Thanks to the program, managers can thoroughly assess the level of risk as well as the management practices in this new and complex field.

Why did the Fed decide to terminate this program and switch to standard monitoring?

The Fed stated that the program has completed its mission to better understand the risks and control measures in banking related to cryptocurrencies and fintech.

The shift to the standard monitoring process reflects the maturity and comprehensive grasp of the Fed regarding these activities, enabling more effective management without the need for a separate monitoring framework. This could also reduce administrative pressure and make banks more flexible in collaborating with financial technology partners.

"Since the monitoring program was issued, we have reinforced our understanding of cryptocurrency and fintech activities at banks as well as the related risks and how to manage them."

Official announcement from the Central Bank of the United States, 2025

How does the termination of the monitoring program affect the cryptocurrency market and banks?

The transition of supervision is expected to ease pressure on banks collaborating with the cryptocurrency and fintech sectors, paving the way for more partnerships and innovations in blockchain and asset tokenization.

However, the issue of supervision in the DeFi sector remains due to rapid development and complexity, making risk management a challenge for operators.

Currently, the cryptocurrency market has not reacted strongly, but if banks gain more confidence and favorability in standard supervision, it may attract larger institutional capital flows in the near future.

Frequently Asked Questions

What role does the Novel Activities Supervision program play in banking management?

The program helps the Fed closely monitor complex banking activities related to cryptocurrencies, blockchain, and fintech to clearly understand the risks and appropriate controls.

Why was this program terminated?

The Fed stated that the program has fulfilled its goal of enhancing understanding of risks and management in the fields of cryptocurrency and fintech, thus transitioning back to standard supervision.

How does the termination of the program affect banks?

This could ease regulatory pressure, facilitating banks in collaborating and developing services related to cryptocurrencies and fintech.

Will standard supervision be fast enough to keep up with DeFi?

DeFi is rapidly evolving and complex, making risk management still a challenge, and conventional supervision may not always keep pace with the rate of change.

How does the cryptocurrency market respond to this decision?

The social network has not reacted strongly yet, but if banks operate more favorably, it can boost institutional capital flows and innovation in the cryptocurrency space.

Source: https://tintucbitcoin.com/fed-dung-giam-sat-dac-biet-crypto/

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