Federal Reserve Announces Sunset of Novel Activities Supervision Program

The Federal Reserve Board of Governors (the Fed) recently announced the termination of its Novel Activities Supervision Program (the Program). 

The Program was established in August of 2023, and was designed to enhance the supervision of emerging financial activities conducted by banking organizations, such as crypto-asset operations, distributed ledger technology projects, and complicated partnerships between banks and fintech firms, to ensure these innovations were managed safely within the banking system.  See prior WBK coverage of the Program.

In rescinding the Program, the Fed cited its increased understanding of these activities and their related risks, and the integration of that knowledge into the Fed’s standard supervisory process.