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The Federal Reserve and the Office of the Comptroller of the Currency – the nation’s top banking regulators — will soon loosen their tough stance when it comes to digital assets now that President Trump has fully embraced the industry, On The Money has learned.
Officials at the nation’s top banks, namely JP Morgan and Bank of America, are growing more optimistic that regulators will soften their long-held anti-crypto stance. They expect to be providing even basic services to crypto clients such as holding digital assets in custody, even buying bitcoin exchange-traded funds at their branches.
The change in sentiment at the bank’s top overlords all began with President Trump’s courting of the $3.5 trillion crypto business and its top executives, and promising to end the Biden-era regulatory assault on the industry, Fox Business’s Eleanor Terrett reports.
Trump put words into action earlier this month when his Securities and Exchange Commission reversed Biden’s strict accounting guidance that made it difficult for banks to keep custody of digital assets.
The move could continue the ascension of crypto price — including Bitcoin, the world’s most popular digital coin — already experiencing a significant post-election rally. Bitcoin is up nearly 124% over the past year, trading at close to $100,000.
“I expect banking regulators to get on board with the administration’s newfound approach to crypto and we will see banks enter the space at a rapid pace,” Mike Lempres, former chairman of the now defunct Silvergate Capital Corporation, and a consultant to crypto companies, told Terrett.
Silvergate voluntarily liquidated in 2023 because the regulatory requirements were too onerous following FTX.
“Blockchain technology can lead to a dramatic increase in banks’ ability to service customers and to comply with Bank Secrecy Act rules,” Lempres added.
Both the Fed and the OCC, an arm of the Treasury Department, are semi-independent regulators of the nation’s big banks, and could theoretically ignore the guidance given by the SEC. Following the collapse of Sam Bankman-Fried’s FTX crypto exchange and the improper use of customer money, both went on a jihad against crypto in the banking system.
But now that the Trump Administration is fully embracing crypto, and Congress is taking steps to push through legislation for a new regulatory framework for digital assets, bankers say the word they’re getting from the Fed and OCC is that they will soon get clearance to jump into the crypto business in ways they couldn’t in the past.
Reps for the Fed and OCC had no immediate comment.
Whether it’s a good idea for banks to dive head-first into crypto depends on who you speak to. Crypto proponents believe the business is largely a sound one; critics say it’s still a haven for illegal activity such as laundering money for global criminal organizations.
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Crypto is also considered a volatile, risky asset; on Sunday, Bitcoin fell $10,000 to $92,000 only to recover, rising another $10,000 on Monday to close at $110,000. Some banking analysts worry that such wild swings could jeopardize the banking system depending on the size and scale of the bank’s crypto business going forward.
That said, bankers expect to be getting the green light to do more crypto business in short order given Trump’s mandate to make the US the crypto capital of the world. “I’m confident we’ll see some encouraging guidance from the Fed and the OCC in the coming months,” said an executive at Bank of America. BofA’s CEO Brian Moynihan recently said the bank would jump into crypto payments as soon as regulators allow.
Last week, Fed chairman Jerome Powell said in his post Fed-meeting press conference that banks are “perfectly able” to serve crypto customers, and doesn’t want to take actions that would cause banks to “debank” or cancel customers who are crypto centric because of excess risk aversion.