The U.S. Federal Reserve announced on Friday, August 15, 2025, the end of the 'Novel Activities' oversight program, which imposed additional supervision on banks' transactions related to crypto and modern financial technologies. Under the decision, these activities will return to the usual banking supervision framework.
The council explained in its statement that this step reflects a deeper understanding of the nature of these activities and the risks associated with them, in addition to the evolution of risk management practices within banks. It also rescinded the supervisory circular issued in 2023 that had launched the program.
The program, which began on August 8, 2023, aimed to enhance oversight of bank activities related to crypto, with the most notable aspects being:
Custody of digital assets.
Lending backed by cryptocurrencies.
Facilitating digital asset trading operations.
Issuing stablecoins and digital currencies pegged to the dollar.
Implementing projects based on Distributed Ledger Technology (DLT), such as tokenizing securities and other assets.
The oversight also included monitoring complex technological partnerships between banks and non-bank companies, including providing services through Application Programming Interfaces (APIs), and overseeing banks' dealings with crypto companies in areas such as deposits, payments, and lending.
When the program was launched in 2023, the Federal Reserve justified this step by stating that financial innovation can impose rapid changes and generate new forms of risk. The program was then designed to rely on risk assessment and integrate into existing supervisory frameworks, emphasizing that banks were not prohibited from providing legal services to any category of customers.
The cancellation of the program aligns with similar steps from other regulatory bodies, such as the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), which in turn eased procedural restrictions on banks' participation in the crypto sector, while continuing to focus on risk management and compliance.
This shift comes in a more supportive political context for digital assets, as the administration of President Donald Trump seeks to make the United States the 'global crypto capital.' On August 14, 2025, U.S. Treasury Secretary Scott Pason announced plans to purchase more Bitcoin and create an official U.S. reserve of it, in a move that enhances Washington's direction towards integrating crypto into the banking sector.