The Federal Reserve just dropped its semiannual Supervision and Regulation Report, and buried inside the typical banking health metrics is a story crypto investors should care about: the Fed is systematically dismantling the regulatory barriers that once made banks treat digital assets like radioactive waste.
Over 99% of US banking organizations were well-capitalized as of the second quarter of 2025, with aggregate Common Equity Tier 1 capital ratios sitting at roughly 13%. Aggregate deposits at US commercial banks hit a historic high of $18.3 trillion in August 2025.
The crypto regulatory thaw, in detail
The report documents two pivotal regulatory shifts that happened earlier this year. In April 2025, the Federal Reserve rescinded guidance that had previously required banks to provide advance notification before engaging in crypto-asset activities. Then in August, the Fed announced the sunset of its novel activities supervision program, the dedicated oversight apparatus that had been specifically monitoring banks’ crypto and fintech operations.
Rather than treating crypto as something that demands its own special supervisory infrastructure, the Fed is folding digital asset oversight into its standard examination processes. The Fed described a strategic pivot toward focusing on material financial risks rather than procedural compliance issues, with the goal of aligning oversight more precisely with each institution’s size and risk profile.
