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."
Resources
Crypto/DLT:
- SR 22-6 / CA 22-6: Engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations
- Joint Statement on Crypto-Asset Risks to Banking Organizations (PDF)
- Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities (PDF)
- Policy Statement on Section 9(13) of the Federal Reserve Act
- SR 23-8 / CA 23-5: Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens
Bank-fintech partnerships
- SR 23-4: Interagency Guidance on Third-Party Relationships: Risk Management
- SR 21-16 / CA 21-13: Community Bank Access to Innovation through Partnerships
- Conducting Due Diligence on Financial Technology Firms: A Guide for Community Banks
- Federal Register notice: Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses
- Joint Statement on Banks’ Arrangements with Third Parties to Deliver Bank Deposit Products and Services (PDF)