- The Federal Reserve ends its Novel Activities Supervision Program as Trump eases digital asset rules.
- Potential increase in crypto services from banks due to reduced compliance.
- Market likely to see shifts in asset flows and banking partnerships.
The U.S. Federal Reserve concluded its Novel Activities Supervision Program, officially folding crypto oversight into standard processes amid policy changes under President Trump, announced August 2023.
This regulatory shift potentially stimulates financial institutions’ crypto services development, enhancing innovation and market participation.
The Federal Reserve has officially ended its Novel Activities Supervision Program, initially intended for banks involved with crypto. This rollback coincides with President Trump’s easing of digital asset rules in 2025, leading to a more permissive landscape.
Key figures include the U.S. Federal Reserve, with the ending of the program led by changes in Trump’s regulatory priorities. Banks will transition back to the standard regulatory process, a departure from specialized scrutiny instituted in 2023.
The immediate effects involve reduced compliance burden for banks, likely encouraging increased crypto services. This change aligns with Senator Cynthia Lummis’s support for a more open environment, as noted in her public endorsement of deregulatory moves.
With eased restrictions, banks are expected to enhance services in crypto custody, lending, and payments. Financial institutions now have broader opportunities to engage with crypto clients without the extra compliance formerly required.
Analysts anticipate that core assets like BTC, ETH, and stablecoins may see heightened institutional interest. Banks’ participation in decentralized finance and other crypto services could foster significant shifts in market liquidity and asset valuation.
Historically, such deregulatory actions have led to increased market activity for governance tokens and DeFi protocols. Analysts suggest potential trends similar to the OCC’s 2021 guidance rollback, impacting ETH and Layer 1/2 assets positively.
Senator Cynthia Lummis, U.S. Senator, “The Federal Reserve’s withdrawal from direct oversight signals a more open regulatory environment for banks and crypto-related businesses.” – source
