Federal Reserve ended its special crypto and fintech supervision program

The Federal Reserve announced on August 15, 2025 that it would end its Novel Activities Supervision Program and return oversight of banks’ crypto, distributed-ledger and technology-driven financial activities to its standard supervisory process.

The Board also rescinded SR 23-7, the August 8, 2023 supervisory letter that created the program. The change mattered because it removed a dedicated federal oversight structure built specifically around emerging financial technologies. It did not exempt cryptocurrency activities from bank examinations or authorize every proposed digital-asset business.

What the program covered

SR 23-7 applied to all banking organizations supervised by the Federal Reserve, including institutions with $10 billion or less in consolidated assets. Its remit covered crypto-asset custody, crypto-collateralized lending, facilitation of crypto trading, stablecoin issuance or distribution, tokenization projects and other potentially significant uses of distributed-ledger technology.

The program also examined complex technology partnerships through which nonbanks could provide financial services using access to bank infrastructure. Another focus was concentration risk at banks supplying deposits, payments or credit to crypto and fintech companies. The framework was risk-based: examination intensity was supposed to vary according to each institution’s involvement in the specified activities.

Although it was a specialized program, SR 23-7 said participating institutions would remain in their existing supervisory portfolios. Dedicated personnel worked alongside established examination teams, monitored firms exploring novel activities and sought to build technical expertise across the Federal Reserve System.

What changed—and what did not

The August 15 announcement was brief. The Federal Reserve said it had strengthened its understanding of novel activities, their risks and banks’ risk-management practices during the program’s two years of operation. It would therefore integrate that knowledge and the associated oversight into ordinary supervision.

That explanation supports a narrow conclusion: the Fed no longer considered a separate program necessary. It does not establish that crypto custody, stablecoin operations or blockchain-based services were without risk. Banks remained responsible for determining permissibility, maintaining safety and soundness, protecting consumers, addressing cybersecurity and illicit-finance risks, and meeting other requirements applicable to their activities.

The action did not itself approve a product, compel a bank to serve a crypto company or change the statutory authority of Federal Reserve-supervised institutions. The immediate regulatory event was organizational and procedural—the withdrawal of SR 23-7 and movement of its subject matter into the normal examination system.

Part of a broader 2025 policy sequence

The decision followed earlier changes by the federal banking agencies. On March 7, 2025, the Office of the Comptroller of the Currency reaffirmed that national banks and federal savings associations could conduct specified custody, stablecoin and distributed-ledger activities while removing a prior supervisory non-objection process.

On March 28, the Federal Deposit Insurance Corporation said institutions under its supervision could pursue permissible crypto activities without prior FDIC approval, provided they adequately managed the associated risks. On April 24, the Federal Reserve withdrew its advance-notification expectation for crypto activities and its non-objection process for certain dollar-token projects. It also joined the FDIC in withdrawing two interagency crypto-risk statements from 2023.

Against that contemporaneous sequence, ending the Novel Activities Supervision Program represented another move away from crypto-specific supervisory machinery. Reuters described the August 15 action as the Fed scrapping a program dedicated to policing banks’ crypto and fintech activities while retaining the work within regular oversight.

The institutional significance

For banks, the change potentially reduced the procedural distinction between digital-asset projects and other technology or product initiatives during supervision. For crypto companies seeking custody, payments or deposit relationships, it signaled that those activities would no longer be routed through this particular specialized program.

The practical effect remained uncertain on August 15. The Fed disclosed no affected-bank count, examination schedule, staffing change or quantitative estimate of reduced compliance costs. It also reported no cryptocurrency price response. The defensible event-day conclusion was limited but consequential: specialized oversight ended, while the underlying risks and supervisory responsibilities moved into the Federal Reserve’s ordinary banking framework.