The Federal Reserve has ended its specialized crypto supervision program for banks, marking a significant change in the regulatory landscape for digital assets. The move aligns with a Trump administration directive aiming to reduce regulatory scrutiny on cryptocurrencies and fintech companies. This change could lead to increased bank involvement in the cryptocurrency industry due to reduced compliance hurdles, potentially boosting liquidity and innovation within DeFi platforms. The Fed is withdrawing its supervisory guidance regarding banks’ activities involving cryptocurrency assets, transitioning from the unique oversight program initiated in 2023. This shift reflects broader regulatory adaptations as the Fed resets back to traditional supervisory procedures. The Federal Reserve’s board of governors has rescinded its 2022 directive requiring advance notification for crypto-asset plans, indicating less focus on preemptive regulation.