The year began with an Executive Order, “Strengthening American Leadership in Digital Financial Technology,” that stated the Trump Administration’s policy to establish the U.S. as a global leader in the responsible growth and innovation of digital assets and related blockchain technologies. As to the banking industry, the Trump Administration’s approach has focused on finding ways to allow the industry to not only service the growing digital ecosystem but also actively participate in its development. In turn, the federal banking regulators have undergone a rapid and significant sea change in approach to the regulatory guidance on the U.S. banking industry’s engagement with digital assets.

The industry’s response has varied greatly, from rapid to reticent. At the beginning of the year, Bank of America CEO Brian Moynihan predicted during an interview with CNBC that if the rules allow it, “you will find the banking system will come in hard on the transactional side of it.”¹ The regulators have now clarified and confirmed that the rules allow it, and the industry is responding. In May, following the most recent confirmatory statement of the Office of the Comptroller of the Currency (OCC), JP Morgan Chase publicly announced that it will begin to buy and sell bitcoin on behalf of its customers — accounting for the transactions and holdings on statements without providing custody services — and that it has been exploring the development of blockchain technologies, such as its Kinexys² for more than a decade.³ Other banks, such as The Bank of New York Mellon, have successfully launched digital asset custody solutions.⁴

Days after the Senate passed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act,⁵ Fiserve Inc. announced that it is developing a stablecoin, FIUSD, in partnership with PayPal Holdings Inc. and Circle Internet Group Inc. for use by its 10,000 financial institutions and merchants. Fiserve’s COO Takis Gerogakopoulos stated in an interview with Bloomberg Law, “The danger for any bank that ignores this trend is, contrary to the past, this is happening. The issue if you are a bank and you don’t participate is that you may lose clients, you may lose flows, you may be seen as stuck in the past.”⁶ Mastercard then also announced a partnership with Fiserve to broaden the reach and utility of the FIUSD stablecoin.⁷ And most recently, on June 25, the director of the Federal Housing Finance Agency publicly posted on X that he has directed Fannie Mae and Freddie Mac to prepare proposals to recognize and accept certain cryptocurrencies as qualifying assets for mortgage qualification without conversion to U.S. dollars.⁸

So, what has changed on the regulatory front to permit the industry’s rapid adoption? A quick recap of the year-to-date regulatory developments leading up to the recent mainstream adoption is helpful.

First, on the heels of the Executive Order, the FDIC publicly released 25 previously issued pause letters, followed by a broad swathe of supervisory documents related to institution initiatives to launch crypto-related activities. The FDIC’s responses revealed a repeated message to the banking industry that participation in the crypto industry was virtually impossible. However, in a statement that accompanied the public release of the supervisory records, Acting Chairman Travis Hill stated:

“Looking forward,” the FDIC is “actively reevaluating [its] supervisory approach to crypto-related activities. This includes … providing a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles. The FDIC also looks forward to engaging with the president’s Working Group on Digital Asset Markets.”⁹

The OCC quickly followed suit, issuing a formal statement in March that “reaffirms that the crypto-asset custody, distributed ledger and stablecoin activities discussed in prior letters are permissible” and rescinding its prior position that national banks must first receive supervisory non-objection prior to engaging in crypto-asset activities, as did the FDIC and the Federal Reserve.¹⁰ In announcing the agenda of the OCC, Acting Comptroller Rodney Hood included “accelerating bank-fintech partnerships” and “expanding responsible engagement with digital assets” as two of the agency’s top four priority strategies for the industry.¹¹ Hood has also recognized how broadly and rapidly mainstream adoption of digital assets is occurring:

“In today’s digital age, innovation is not optional — it is essential.”¹² “More than 50 million Americans hold some form of cryptocurrency. This digitalization of financial services is not a trend; it is a transformation.”¹³

The legal authority of banks to participate in the crypto-industry has been recognized by the federal banking regulators since 2020, when the OCC issued a trilogy of interpretive letters regarding the types of digital asset services that fall within the statutory sphere of the “business of banking” for national banks.¹⁴ Those activities included providing cryptocurrency custody services, holding cash deposits to reserve against stablecoin tokens and acting as nodes on distributed ledgers to verify and facilitate payment transactions. In recognizing the legal permissibility of certain crypto-activities, the OCC emphasized that the risk management required to meet safety and soundness standards would need to be tailored to the specific product and appropriately account for the unique operational risks (e.g., hacking, theft, fraud and third-party risk management), liquidity risks and a written compliance plan to evidence compliance with all applicable laws (e.g., BSA/AML and applicable consumer protection laws).

In its most recently issued Interpretive Letter, “Clarification of Bank Authority Regarding Crypto-Asset Custody Services,” the OCC again reaffirmed that banks are authorized to provide crypto-asset custody services, both in fiduciary and non-fiduciary capacities, directly and through third-party sub-custodial arrangements.¹⁵ The OCC cites long-standing legal precedent recognizing that as the powers of national banks have been tested over time, their powers “must be construed so as to permit the use of new ways of conducting the very old business of banking.”¹⁶ The types of custody-adjacent activities that the OCC has previously recognized as authorized include facilitating fiat exchange and trade transactions, settlement, trade execution, recordkeeping, valuation and tax services.¹⁷ The OCC’s most recent clarification also confirmed that banks may also “buy and sell” assets that are held in custody at the direction of a customer.

Although regulatory clarity is developing, there remains much to be clarified. In a Joint Letter to the president’s Digital Assets Working Group submitted by numerous industry groups on May 1, 2025, the trade organizations jointly recommended three remaining priority initiatives as critical to the ability of banks to maintain their role as essential components in the financial services sector and economy: (1) a coordinated and common approach across all federal bank regulators regarding the ability of banks to engage in distributed ledger technology and related digital asset activities; (2) codification of a technology-neutral approach to determinations regarding what types of activities are legally permissible for banks to engage in; and (3) publication of uniform guidance specific to risk-management expectations for digital asset activities engaged in by banks, including areas such as anti-money laundering and capital and liquidity standards relative to blockchain exposure.¹⁸

Realizing that community banks may be facing unique challenges to incorporate digital assets into strategies and operations, on May 12, 2025, the OCC published a Request for Information (RFI) Regarding Community Bank Digitalization.¹⁹ The OCC recognizes digital technology solutions as tools that could allow community banks to better serve their customers and meet customer demand, while increasing revenue, improving efficiencies and remaining competitive. The goal of the recent RFI is to “help the OCC better understand the specific obstacles that community banks encounter in their efforts to modernize operations, enhance customer experience and remain competitive in an increasingly digital financial services environment.” The RFI follows the OCC’s launch of its digitalization page earlier this year, which compiles resources specific to community banks on topics such as safety and soundness, risk management and guidance related to emerging technologies.²⁰

Now continues to be the time for banks of all sizes to educate themselves on the digital transformations occurring throughout the industry, which may require gaining subject matter expertise so that boards of directors and senior management can understand the potential impacts that pending legislation may have on future operations, competition for deposits, risks and technology strategies. Reviewing and understanding the areas that the OCC recently sought information on as relevant to future policy is just one way to do so.