Fed Shifts Crypto Oversight to Regular Supervision: Implications for Investors and Businesses in Oman
WASHINGTON: The US Federal Reserve announced on Thursday its decision to dissolve the dedicated program for overseeing banks involved in cryptocurrencies and financial technology (fintech). This oversight will now be integrated into the Fed’s broader supervisory framework.
The “novel activities supervision program,” initiated in 2023, was designed to assess risks associated with digital assets, blockchain services, and collaborations between banks and technology companies. The Federal Reserve indicated that it no longer requires a separate structure, as regulators have developed a clearer understanding of how institutions manage these risks.
Moving forward, the supervision of crypto-related activities and fintech will be managed through the Fed’s standard supervisory channels, promoting consistency across the banking sector.
This change aligns with the evolving approach of US regulators towards emerging financial technologies. In June, the Fed also eliminated "reputational risk" as a distinct category in bank supervision, a shift that analysts noted indicates a push towards more streamlined oversight.
According to a policy analyst based in Washington, "Integrating these activities into the routine supervisory process reflects both the maturation of the sector and the central bank’s confidence in banks’ risk management practices."
The Federal Reserve’s decision highlights how regulators are recalibrating rules governing digital finance, aiming to find a balance between innovation and systemic stability amid increasing public scrutiny over cryptocurrencies. — Reuters
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The US Federal Reserve’s decision to streamline crypto and fintech oversight embodies a pivotal moment in regulatory confidence, signaling both الفرص والتحديات for Oman’s businesses. As the integration into broader supervisory frameworks occurs, Omani investors should consider aligning with regulatory trends in cryptocurrency and fintech to leverage potential growth, while also staying vigilant about how global shifts may impact local market dynamics. This evolution calls for smart entrepreneurs to adapt their strategies to embrace technological advancements while ensuring compliance and stability.
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