The U.S. Federal Reserve recently announced an important regulatory policy change. The special regulatory program targeting the banking sector's "new activities" has officially been terminated, and related businesses will be incorporated into the regular banking regulatory framework. This decision covers multiple areas including Crypto Assets custody, stablecoin issuance, and Blockchain technology applications.

This change reflects the Federal Reserve's in-depth understanding of the fintech and crypto assets sectors. Through a special review over the past two years, the regulators have systematically grasped the risk characteristics and management methods that banks face when dealing with these emerging businesses. This valuable experience and knowledge will be integrated into standard regulatory processes to ensure more comprehensive and effective supervision.

It is worth noting that the special regulatory guidance issued in 2023 (SR 23-7) will be abolished. This means that banking institutions are no longer required to report separately on their encryption-related business. This move may provide greater flexibility for banks to engage in innovative business activities, while also indicating that regulatory agencies have gained a more mature understanding of this field.

This policy adjustment reflects the efforts of regulatory agencies to balance innovation and risk management. By incorporating emerging financial technology businesses into the regular regulatory framework, the Federal Reserve acknowledges the importance of these businesses while ensuring ongoing supervision over them. This initiative may encourage more traditional financial institutions to explore Crypto Assets and Blockchain technology, while also laying the foundation for the long-term healthy development of the entire industry.

However, this does not mean a relaxation of regulation. On the contrary, this approach may signal a more refined and mature regulatory strategy for emerging financial technologies. In the future, we may see more customized regulatory measures targeting specific business risks, rather than blanket restrictions or special treatments.