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Novel Activities Supervision Program

Novel Activities Supervision Program

The Federal Reserve's novel activities supervision program enhances the supervision of novel activities conducted by banking organizations supervised by the Federal Reserve. The program focuses on novel activities related to crypto-assets, distributed ledger technology (DLT), and complex, technology-driven partnerships with nonbanks to deliver financial services to customers. It is risk-focused and complements existing supervisory processes, strengthening the oversight of novel activities conducted by supervised banking organizations.

The goal of the program is to foster the benefits of financial innovation while recognizing and appropriately addressing risks to ensure the safety and soundness of the banking system. It is integrated into the Federal Reserve's existing supervisory processes, with program experts working alongside current supervisory teams to oversee the novel activities supervised institutions are engaging in, rather than moving those supervised institutions to a separate supervisory portfolio.

The program enhances the supervision of novel activities conducted by supervised banking organizations, with a focus on the following activities:

  • Complex, technology-driven partnerships with non-banks to provide banking services – Partnerships where a non-bank serves as a provider of banking products and services to end customers, usually involving technologies like application programming interfaces that provide automated access to the bank's infrastructure.
  • Crypto-asset related activities – Activities such as crypto-asset custody, crypto-collateralized lending, facilitating crypto-asset trading, and engaging in stablecoin/dollar token issuance or distribution.
  • Projects that use DLT with the potential for significant impact on the financial system – The exploration or use of DLT for various use cases such as issuance of dollar tokens and tokenization of securities or other assets.
  • Concentrated provision of banking services to crypto-asset-related entities and fintechs – Banking organizations concentrated in providing traditional banking activities such as deposits, payments, and lending to crypto-asset-related entities and fintechs.

Additional information can be found in SR letter 23-7, "Creation of Novel Activities Supervision Program."

Related Guidance

Crypto/DLT:

Bank-fintech partnerships

 

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Last Update: October 04, 2023