What was the Federal Reserve's Novel Activities Supervision Program?

Launched in 2023, the Novel Activities Supervision Program was a special oversight initiative to monitor banks engaged in crypto, fintech, and other emerging technologies.

Why did the Federal Reserve end the program?

The Fed ended the program to fold oversight of crypto and fintech into its regular supervision framework, citing normalization of these activities and efficiency gains.

Does this mean the Fed is relaxing crypto rules?

No. The same regulatory standards still apply to banks involved in crypto and fintech. The move reflects a process change, not a policy shift.

The Fed Just Buried Its “Crypto Watchdog” Program — But Don’t Call It a Policy Pivot

Rebellionaire Staff
Aug 15
3 min read

In 2023, the Federal Reserve rolled out the Novel Activities Supervision Program — a very official-sounding way of saying, “We’re gonna keep a special eye on banks messing with weird new stuff like crypto and fintech partnerships.”

It was the financial equivalent of a neighborhood watch committee, except the “neighborhood” was America’s banking system, and the “watch” was mostly aimed at making sure banks didn’t dive headfirst into blockchain or stablecoin projects without wearing regulatory water wings.

Fast-forward to now: that program’s done. Terminated. Retired early with no gold watch. But before you start thinking this is some crypto-friendly U-turn from the Fed… nope.

So, what actually changed?

The program isn’t being replaced with some kind of Wild West free-for-all. Instead, the Fed is rolling its crypto-and-fintech oversight into its regular bank supervision framework. That’s the same toolkit they use to monitor lending, liquidity, risk management — the unsexy but essential plumbing of the financial system.

Think of it like this: crypto used to have its own lifeguard on duty. Now it’s just swimming in the same pool as everything else… but the regular lifeguards are still on the clock.

Why scrap a special program?

A few possible reasons — none of them a glowing endorsement of Bitcoin or DeFi:

Crypto’s not “novel” anymoreIn 2023, regulators were still treating crypto as an exotic creature that needed its own enclosure. Two years later, banks dabbling in crypto custody or stablecoin settlement aren’t rare birds. The novelty has worn off, and the Fed’s treating it like any other banking activity with risk attached.
Efficiency over bureaucracySpecial programs mean extra staff, duplicate processes, and a lot of regulatory paperwork. Folding crypto oversight into the main supervisory pipeline streamlines things — and makes it easier to apply consistent rules across the board.
Regulatory opticsSingling out crypto for its own “special” program was always a bit of a statement. Ending it may be a subtle way of saying: “We’re not going to make it look like crypto is the only thing we’re worried about. It’s just one more piece of the puzzle.”

What this means for banks

If you’re a bank that’s been exploring partnerships with a fintech startup or looking at stablecoin custody, this is a procedural shift, not a free pass. The Fed is still going to want to know:

How you’re managing risks like fraud, cyberattacks, and liquidity.
Whether your crypto activities could hurt depositors if things go south.
If you actually understand the tech you’re using — and aren’t just slapping “blockchain” on your press releases.

The main difference? You’re no longer being dragged into a separate conference room for every crypto-related move. It’s all part of your standard check-ins with regulators.

What this means for crypto companies

Here’s where it gets interesting. Banks are the gatekeepers for crypto firms — especially those handling fiat on-ramps, stablecoin backing, or payment processing.

When the Novel Activities Supervision Program launched, a lot of banks slowed down or froze crypto partnerships because they didn’t want to get caught in the regulatory crosshairs. With the special program gone, that chilling effect might ease a bit.

This could mean:

More willingness from banks to provide accounts and services to crypto-related businesses.
Fewer delays in getting approvals for fintech-crypto collaborations.
Slightly more confidence in experimenting with blockchain-based payment systems.

Still, the key word is slightly. This isn’t the green light for “let’s tokenize everything” season.

Why this isn’t a crypto policy shift

A lot of people are going to spin this as “The Fed is softening on crypto.” But look at the fine print:

Same rules, different filing cabinet. The underlying supervisory expectations haven’t changed.
Same risk concerns. Stablecoins, DeFi lending, and crypto custody still carry regulatory red flags — volatility, operational risk, money laundering.
Same cautious tone. The Fed isn’t suddenly encouraging banks to load up on ETH or sponsor NFT-backed mortgages.

The bigger picture

This move fits into a broader theme we’ve been seeing: regulators are slowly absorbing crypto into the traditional financial system rather than building separate structures around it.

First, it was the OCC clarifying how banks can handle stablecoin payments (with the right controls). Then it was the SEC inching toward approving spot Bitcoin ETFs. Now the Fed’s saying, “Alright, crypto supervision can live in the main house instead of the guest cottage.”

It’s integration, not revolution.

If you’re a bank exec? This might make your life a bit easier.If you’re in crypto? It’s another step toward legitimacy… just don’t confuse that with freedom. If you’re the Fed? Congratulations — you’ve successfully made one of the most controversial sectors of finance sound boring.