The Federal Reserve Board announced Friday that it will end its novel activities supervision program, which was created to oversee certain crypto and fintech activities in banks. The Board stated that it will return to monitoring these activities through the normal supervisory process.
The program began as a way for the Board to supervise emerging financial technologies and related risks within the banking sector. According to the Board, since the program’s inception, it has improved its understanding of these activities, associated risks, and how banks manage them. As a result, the Board said it is now prepared to integrate this knowledge into its standard supervisory practices.
“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices. As a result, the Board is integrating that knowledge and the supervision of those activities back into the standard supervisory process and is rescinding its 2023 supervisory letter creating the program,” according to a statement from the Federal Reserve Board.
The move means that oversight of novel banking activities involving new technologies will now be handled as part of regular bank examinations rather than through a separate framework.
