- The Federal Reserve ended its special crypto banking monitoring program and will use normal supervision instead.
- Trump signed an executive order to stop unfair banking practices against crypto companies.
- Industry leaders called this a major win for cryptocurrency banking access.
The Federal Reserve announced the termination of its specialized cryptocurrency banking supervision program, marking a significant shift in regulatory approach toward digital assets. The central bank will discontinue its novel activities supervision program and integrate crypto monitoring into standard supervisory processes.
The Fed’s decision comes after President Donald Trump signed an executive order targeting unfair banking practices. The order specifically addressed Operation Chokepoint, alleging that banking regulators pressured financial institutions to sever relationships with cryptocurrency companies.
Program Dissolution and Integration
Since launching the program, the Federal Reserve stated it has gained substantial knowledge about crypto activities, associated risks, and bank risk management practices. This understanding will now be incorporated into regular supervisory procedures rather than maintained as a separate initiative.
The central bank plans to rescind its 2023 supervisory letter establishing the specialized program. Industry observers viewed this program as a mechanism for implementing Operation Chokepoint policies under the previous administration.
Trump’s executive order mandated that banking regulators eliminate guidance for targeted actions against specific firms and individuals. The order cited concerns about discrimination based on religious, political, or ideological grounds.
The regulatory shift extends beyond the supervision program. Last month, the Federal Reserve and other banking regulators confirmed that banks could custody cryptocurrency assets. These institutions must apply the same rules governing traditional asset custody to digital asset storage.
Industry Response and Market Impact
Senator Cynthia Lummis described the Fed’s announcement as a major victory against Operation Chokepoint 2.0. The pro-cryptocurrency legislator acknowledged the progress while noting additional work remains to establish equitable treatment for digital assets.
Strategy co-founder Michael Saylor commented that the development clears the path for Bitcoin banking integration. According to recent reports, Strategy maintains the largest corporate Bitcoin treasury, holding 628,946 BTC.
Financial journalist Eleanor Terrett highlighted legal expert opinions suggesting that the novel activities supervision program was a primary catalyst for Operation Chokepoint 2.0. Legal professionals noted that while the Federal Reserve has not rescinded all previous anti-cryptocurrency guidance, this action represents meaningful progress.
The Federal Reserve’s policy reversal signals a broader transformation in cryptocurrency regulation under the current administration. Banking institutions now face reduced uncertainty regarding digital asset activities and partnerships.
The move addresses longstanding industry complaints about regulatory hostility toward cryptocurrency businesses. Financial service providers previously encountered difficulties securing banking relationships due to regulatory pressure.
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