SR 23-7 Creation of Novel Activities Supervision Program (stamped withdrawn 2025-08-15)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF SUPERVISION
AND REGULATION
SR 23-7
August 8, 2023
TO THE OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE
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SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK
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SUBJECT: Creation of Novel Activities Supervision Program
Applicability: This letter applies to all banking organizations supervised by the Federal
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Reserve, including those with $10 billion or less in consolidated assets.
The Federal Reserve has established a Novel Activities Supervision Program (Program)
to enhance the supervision of novel activities conducted by banking organizations supervised by
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the Federal Reserve. The Program will focus on novel activities related to crypto-assets,
distributed ledger technology (DLT), and complex, technology-driven partnerships with
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nonbanks to deliver financial services to customers. The Program will be risk-focused and
complement existing supervisory processes, strengthening the oversight of novel activities
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conducted by supervised banking organizations.
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Background
Financial innovation supported by new technologies can benefit the U.S. economy and
U.S. consumers by spurring competition, reducing costs, creating products that better meet
customer needs, and extending the reach of financial services and products to those typically
underserved. Innovation can also lead to rapid change in individual banks or in the financial
system and generate novel manifestations of risks that can materially impact the safety and
soundness of banking organizations. Given the novelty of these activities, they may create
unique questions around their permissibility, may not be sufficiently addressed by existing
supervisory approaches, and may raise concerns for the broader financial system.
Novel Activities Supervision Program
The Federal Reserve established the Program to ensure that the risks associated with
innovation are appropriately addressed. The Program will enhance the supervision of novel
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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
(APIs) 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. 1
• 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
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tokenization of securities or other assets.
• Concentrated provision of banking services to crypto-asset-related entities and fintechs –
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Banking organizations concentrated in providing traditional banking activities such as
deposits, payments, and lending to crypto-asset-related entities and fintechs.
The Program will work in partnership with existing Federal Reserve supervisory teams to
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monitor and examine novel activities conducted by supervised banking organizations.
Supervised entities engaging in novel activities will not be moved to a separate supervisory
portfolio. Instead, the Program will work within existing supervisory portfolios and alongside
existing supervisory teams. The Program will leverage current supervisory processes to the
extent possible to maximize efficiency and minimize burden.
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The Program will be risk-based, and the level and intensity of supervision will vary based
on the level of engagement in novel activities by each supervised banking organization. The
Federal Reserve will notify in writing those supervised banking organizations whose novel
activities will be subject to examination through the Program. The Federal Reserve will
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periodically evaluate and update which banking organizations should be subject to the
examination of novel activities through the Program, and banking organizations will be notified
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accordingly. In addition, as part of the Program, the Federal Reserve will routinely monitor
supervised banking organizations that are exploring novel activities.
To help ensure the Program is informed by diverse perspectives and best practices in
supervision and risk-management, it will be advised by a range of multidisciplinary leaders from
around the Federal Reserve System. To stay abreast of emerging issues, technologies, and new
products, the Program will engage broadly with external experts from academia and the banking,
finance, and technology industries. The Program will incorporate insights and analysis from real-
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See Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the
Comptroller of the Currency, “Joint Statement on Crypto-Asset Risks to Banking Organizations”, January 3, 2023,
and Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the
Comptroller of the Currency, “Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-
Asset Market Vulnerabilities”, February 23, 2023.
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time data, market monitoring, horizontal exams, and proactive, intentional, and regular
information exchange across portfolios, federal bank regulatory agencies, and other stakeholders.
Through this Program, the Federal Reserve will continue to build upon and enhance its
technical expertise to better understand novel activities, the novel manifestations of risks of such
activities, and appropriate controls to manage such risks. In addition to enhancing the
supervision of risks associated with banking organizations engaging in novel activities, the
Program will also inform the development of supervisory approaches and guidance for banking
organizations engaging in novel activities, as warranted.
The Program will help ensure that regulation and supervision allow for innovations that
improve access to and the delivery of financial services, while also safeguarding bank customers,
banking organizations, and financial stability. The Program will also operate in keeping with the
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principle that banking organizations are neither prohibited nor discouraged from providing
banking services to customers of any specific class or type, as permitted by law or regulation.
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Reserve Banks are asked to distribute this letter to the supervised banking organizations
in their districts and to appropriate supervisory staff. In addition, questions regarding this letter
may be sent via the Board’s public website. 2
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Michael S. Gibson
Director
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Division of Supervision and Regulation
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See http://www.federalreserve.gov/apps/contactus/feedback.aspx.
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