Breaking: Federal Reserve to End Program That Targeted Crypto Banking

In a massive development for the crypto industry, the Federal Reserve has announced that it will be dropping a program that solely focused on crypto banking during the ‘Operation Chokepoint’ era. This follows Donald Trump’s signing of an executive order to end unfair banking practices.

Federal Reserve Ends Monitoring Program Against Crypto Banking

In a press release, the U.S. Central Bank announced that it will sunset its novel activities supervision program and return to monitoring banks’ novel activities through the normal supervisory process.

The Federal Reserve noted that since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of these activities, the risks, and bank risk management practices. With this, the Board will move to integrate that knowledge and the supervision of crypto activities into the standard supervisory process.

Furthermore, the Board will rescind its 2023 supervisory letter that created the program in the first place. This initiative is believed to be one of the ways that the regulator enforced ‘Operation Chokepoint’ under the Biden administration.

This move follows Trump’s signing of an executive order that ended unfair banking practices based on sentimental grounds, such as religion, political, or other ideologies. The order had also cited Operation Chokepoint and how the Federal Reserve coerced banks that it regulates to cut ties with crypto firms and entities.

The executive order had mandated banking regulators to end any guidance that they had instituted to carry out these targeted attacks against firms and individuals. Meanwhile, it is worth mentioning that this isn’t the first guidance that the regulator is releasing on crypto banking.

Last month, the Federal Reserve, alongside other banking regulators, confirmed that banks could custody crypto assets. They stated that the same rules that apply to custody of other assets will apply to crypto custody practices.

Senator Lummis Says Big Win For The Industry

In an X post, pro-crypto Senator Cynthia Lummis said that the move from the Federal Reserve was a big win for ending Operation Chokepoint 2.0. She noted that the Fed announced it is killing the targeted supervision of crypto banking activities.

However, the senator believes there is still more to do, but admitted that this is real progress toward a level playing field for crypto. Meanwhile, Strategy co-founder Michael Saylor remarked that the “road is now clear for Bitcoin and banking.” Strategy holds 628,946 BTC, making it the largest Bitcoin treasury company.

Journalist Eleanor Terrett also commented on the development. She cited a lawyer who said that the novel activities supervision program was a major catalyst for Operation Chokepoint 2.0. She added that while the Federal Reserve has yet to rescind all of its anti-crypto guidance from the Biden era, this is another piece of the puzzle.