A “novel activities” supervision program implemented in 2023 that focused on certain crypto and fintech activities in banks is ceasing, with such supervision to be integrated into the Federal Reserve’s standard supervisory process, the Fed announced Friday.
In Friday’s announcement, the Fed Board said it has since strengthened its understanding of crypto and fintech activities in banks, 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,” it said.
The special supervisory program was announced through an Aug. 8, 2023, supervisory letter. It said the program was intended to “ensure that the risks associated with innovation are appropriately addressed.”
The program, as outlined in that letter, was to focus on novel activities related to crypto-assets, distributed ledger technology (DLT), and complex, technology-driven partnerships with nonbanks to deliver financial services to customers. The program was described as risk-focused and was to complement existing supervisory processes, “strengthening the oversight of novel activities conducted by supervised banking organizations.”
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