This useless program was abolished by the Federal Reserve, but many places are still using it as a treasure

01 Federal Reserve: No longer focusing on encryption alone

On August 15, the Federal Reserve announced the abolition of the "Emerging Activities Supervision Program" (NASP) established in 2023.

NASP was originally designed to monitor bank encryption-related businesses, such as:

• custody of Bitcoin,

• participating in stablecoin settlement,

• cooperating with exchanges.

If banks want to do these, they must report in advance and wait for the Federal Reserve's approval.

Case 1: BIS's "graceful surrender"

Traditional KYC/AML is basically ineffective on the chain;

The only “new tricks” they can think of are: scoring wallets, letting users check themselves, and setting up checkpoints for fiat currency deposits and withdrawals.

However, these methods have limited effectiveness in reality:

• Wallets are generated infinitely, and identities and addresses are easily decoupled;

• Cross-border transactions are completed in seconds, making them impossible to intercept using traditional reporting methods;

• Real criminals have long since circumvented this using mixers and cross-chain bridges.

This report may seem like a new approach, but in reality, it's more like an admission that traditional methods can't control the decentralized world. Case Study 2: The Global Chaos of the Travel Rule In 2019, the FATF forcibly applied its 1996 bank wire rules to cryptocurrencies: Transactions over $1,000 must include identification information. It sounds reasonable, but the results are a mess: Standards vary from country to country: the US has a $3,000 threshold, the EU requires even one cent, and Japan has zero threshold. Implementation is poor: FATF's own 2025 report acknowledged that 75% of countries are still "partially compliant" or "not compliant at all."

• High costs: The Chainalysis 2025 report points out that the Travel Rule has done little to stop illegal funds, but has become the heaviest burden on exchanges' compliance budgets.

In reality, the bad guys continue to take a detour.

And so-called "compliant companies" still have to bear millions of dollars in compliance costs and regulatory exercises each year~

03 Comparison of Two Paths

The United States: Recognizing the limited effectiveness of traditional "special supervision" → Repealing NASP → Incorporating crypto into the existing regulatory system, and then combining it with legislation like the GENIUS Act to pave the way for stablecoins and banking services.

Global (led by FATF/BIS): Continuing to use old methods for blockchain → The Travel Rule is costly and inefficient → Reports are compiled one after another, but criminals remain at large.

In short:

The United States has chosen integration, treating crypto as a new part of the financial industry;

Most countries around the world are still playing catch-up, using 20th-century tools to force 21st-century technology.

04 Conclusion

The Federal Reserve's abolition of NASP isn't a waiver of regulation, but rather an acknowledgement that crypto can no longer be treated as a "special anomaly" and must be integrated into the logic of the mainstream financial system.

In contrast, the global struggle with traditional regulatory systems for crypto applications has resulted in high costs, poor results, and suppressed innovation.

The Pandora's box of decentralization has been opened; don't pretend to regulate what you can't. The real challenges lie in:

• whether regulators can accept the new paradigm, and

• whether technology providers can provide smarter compliance tools.

In the next few years, the regulatory landscape of the crypto world may be a stark contrast between "American integration" and "global performance."