Fed Finally Frowns Less: Crypto Gets a Hall Pass & Banks Breathe Easy

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In a shocking turn of events, the Fed has decided that maybe, just maybe, digital assets aren’t the financial equivalent of a run on the Tower of Babel. This means they’re easing up on their overbearing oversight-probably because they realized crypto isn’t quite the chaotic evil they once suspected. Or maybe they just got tired of trying to keep the blockchain contained like a cat in a paper bag.

Last Friday, the Federal Reserve announced it was retracing its steps and ditching the “special supervision” program made specifically for crypto and fintech activities. Yes, after two long, hard years of pretending to understand what a DeFi protocol is, it’s more or less saying, “You’re on your own, tech wizards.”

Fed Moves Banks’ Crypto Review Back to Normal Oversight

Back in 2023, the Fed launched a shiny new program to keep an eye on the shiny new technology – kind of like security cameras for your toaster. Its goal? To understand these mysterious digital doodads, sort out any risks involved, and keep banks from accidentally turning into the financial equivalent of a house of cards during a hurricane.

Now, after twirling its mustache through the tech landscape, the Fed says it’s got what it wanted and is withdrawing the fancy new oversight. The “supervisory letter” that started it all has been laid to rest, replaced by-wait for it-regular bank supervision. It’s like giving banks a gold star for figuring out how to spin digital gold without setting the building on fire.

Crypto Fans Cheer the Fed’s Cute Little Break

Senator Cynthia Lummis, clearly a fan of anything that doesn’t involve babysitting crypto with a magnifying glass, called it a huge win against “Operation Chokepoint 2.0”-which, aside from sounding like a terrible superhero villain, was a scheme to prevent crypto firms from mingling with old-fashioned banking services.

In layman’s terms: regulators were practically trying to turn digital assets into a bankless wilderness. Critics argued it was unfair and stifled innovation, while the crypto kiddies just wanted to play nice and not get debanked.

“More work remains, but we’re moving towards a more level playing field,” said Lummis, perhaps while doing a small victory dance in her office.

Big win for ending Operation Chokepoint 2.0. The Fed’s finally stopping its targeted crackdown on digital assets. Progress, baby! Plus, now crypto can play without one hand tied behind its back.

– Senator Cynthia Lummis (@SenLummis) August 15, 2025

Michael Saylor, never one to miss a party, chimed in that the path is now clear for Bitcoin and banks to do the hokey pokey together. Meanwhile, journalist Eleanor Terrett pointed out that the Fed’s previous program had unintentionally fueled the chokes and restrictions. So, while some Biden-era guidance still lingers like a bad smell, this step might just be the dawn of a shiny new crypto dawn.

The supervision program was the spark that lit Operation Chokepoint 2.0’s fire. While not all crypto hate from the Biden era has vanished, this is a step closer to freedom for digital assets.

– Eleanor Terrett (@EleanorTerrett) August 15, 2025

U.S. Governments Easing Up & Giving Crypto a Friendly Nudge

This shake-up is just part of the broader plot twist under the Trump administration’s legacy of making policymakers look slightly less paranoid about digital currencies. It’s like someone finally told the regulators, “Maybe letting computer money run wild isn’t the end of the world.”

In April, the Fed and other regulators dropped the “Crypto is Evil” guidance, easing the rules and allowing banks to explore these shiny new opportunities without constantly looking over their shoulder. By June, “reputational risk”-a fancy way of saying “we think this might be bad for our image”-was kicked out of the oversight rules, much like a dog told not to chew the furniture.

Meanwhile, President Trump, having an uncharacteristically chill moment, signed an order to prevent banks from debanking customers on arbitrary grounds like politics, religion, or whether they’re running a bitcoin startup out of their garage.

All in all? The US seems to be turning over a new leaf-freeing crypto from the shackles of suspicion with moves like the Genius Act and Project Crypto, which sound suspiciously like good ideas in a world gone bitcoin-crazy.

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2025-08-16 14:18