The Federal Reserve has formally discontinued its Novel Activities Supervision Program, the dedicated supervisory unit established in 2023 to oversee banks engaged in cryptocurrency and financial technology activities, absorbing its functions into the agency's standard examination architecture and ending the programme's short but consequential existence as a standalone oversight mechanism.
The decision, announced on 15 August 2025, marks a significant policy shift in how the United States' central bank approaches digital asset oversight. Rather than maintaining a ring-fenced supervisory structure for crypto and fintech, the Fed is moving to treat these activities as components of a bank's ordinary risk profile, to be assessed alongside conventional risks such as credit, liquidity, and operational exposure.
CRYPTO OVERSIGHT ENTERS THE MAINSTREAM
Under the Novel Activities Supervision Program, the Federal Reserve had maintained a dedicated team and a distinct set of examination procedures for banks exploring digital asset custody, tokenised deposits, stablecoin issuance, and blockchain-based payment rails. The programme required banks engaged in such activities to seek supervisory non-objection before proceeding, creating an additional layer of oversight that some institutions described as onerous and unpredictable.
By folding those responsibilities into the standard supervisory framework, the Fed is signalling that it regards crypto and fintech activities as sufficiently mature — and their risk characteristics sufficiently understood — to be assessed through existing examination tools rather than a parallel process. Examiners across the Federal Reserve System will now evaluate digital-asset-related activities as part of routine safety-and-soundness reviews, with the nature and complexity of a bank's crypto activities informing the intensity of supervisory attention it receives, as they would for any other high-risk line of business.
Banks that had been subject to enhanced oversight under the programme will transition to ordinary examination cycles. The practical effect is likely to reduce procedural uncertainty for institutions that had been navigating the programme's requirements in parallel with the standard examination process, although the underlying supervisory expectations around risk management and capital adequacy for digital asset activities are expected to remain rigorous.
A BROADER RECALIBRATION OF DIGITAL ASSET POLICY
The move reflects a wider recalibration of federal banking regulators' stance on digital assets. Since the Novel Activities Supervision Program's establishment in 2023, the regulatory and commercial landscape has evolved considerably. A growing number of banks have launched or announced tokenisation pilots, and crypto-related custody services have become an established, if still nascent, line of business for several mid-sized and large institutions. The Fed's decision suggests regulators are increasingly confident that existing supervisory tools — adapted where necessary — are adequate to manage these risks without the need for a dedicated oversight tier.
The decision also has implications beyond the Federal Reserve's own supervisory population. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have each taken steps in recent years to clarify their own positions on digital asset activities by banks. The Fed's integration of crypto oversight into its standard framework may prompt those agencies to similarly reconsider whether bespoke supervisory structures for digital assets remain justified, or whether the maturation of the market calls for a more unified approach. Industry participants will be watching closely to see whether the change signals a broader, system-wide normalisation of how regulators treat banks active in the digital asset space.