A New Era Of Financial Services Begins

Before the introduction of Bitcoin, around 2008, Wells Fargo included the phrase “Banking is necessary. Banks are not” in its 2004 annual report. The adoption of digital assets by traditional banks has been slow, primarily because of regulatory obstacles and a lack of legislative guidance that would help ease fears and reduce risks. Both the regulatory landscape and the chance of meaningful legislation on digital assets appear to be on the horizon. Hopefully, this is the start of a new era for traditional banks and other financial services companies being able to participate in a more meaningful way in blockchain technology solutions and digital asset offerings.

Breaking Down Regulatory Barriers

The regulatory burdens by the IRS and other regulatory agencies was one of the largest barriers to adoption and use of digital assets by financial institutions in the United States. For example, the Internal Revenue Service issued regulations at the end of 2024 that were considered a potentially fatal blow to the growing Decentralized Finance industry. I previously reported on both those regulations and subsequent challenges to those regulations. Those regulations are now awaiting the final blow by the President after the Senate joined the House in voting to pass a motion that would overturn those rules.

On March 7, 2025, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1183, which rescinds the previous Interpretive Letter 1179 and reaffirms the permissibility of certain crypto-asset activities for national banks and federal savings associations. The letter specifically addresses the continuation of activities such as crypto-asset custody services, holding dollar deposits as reserves backing stablecoins, and acting as nodes on distributed ledgers to verify customer payments. The OCC emphasizes that these activities must be conducted in a safe, sound, and fair manner, in compliance with applicable laws, and aligned with sound risk management practices. This move aims to reduce regulatory burden, encourage responsible innovation, and ensure consistent treatment of bank activities regardless of the underlying technology. These national statements, hopefully, will help comfort levels in the financial services industry increase and help spur further investigation by those companies.

On March 28, 2025, the Federal Deposit Insurance Corporation (FDIC) issued new guidance clarifying the process for FDIC-supervised financial institutions to engage in cryptocurrency-related activities. This update rescinds the prior notification requirement for crypto-related activities established by an April 7, 2022 letter (i.e. FIL-16-2022.) The new guidance allows these institutions to participate in permissible crypto-related activities without prior approval, provided they manage the associated risks effectively. The guidance covers a range of activities, including acting as crypto-asset custodians, maintaining stablecoin reserves, issuing digital assets, and participating in blockchain-based settlement systems. The FDIC also noted that it will continue to collaborate with the President’s Working Group on Digital Asset Markets and other banking agencies to provide further clarity and guidance on banks’ involvement in cryptocurrency activities. Therefore, further crypto-friendly guidance for financial institutions appears to be on its way. Also, this is another example the financial services industry can point to as a reason to explore digital asset possibilities.

Three Digital Asset Bills To Watch

Incorporating a unique asset like cryptocurrencies, and other variations of digital assets, into the traditional finance model can be a difficult process, but not impossible. What would make that process a much more attractive option is clear legislation from Congress on how to treat these new assets. There are currently three bills to watch as a new Congress attempts to provide much needed guidance in this area.

The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025 passed the Senate Banking Committee and now moves to the full Senate for consideration. This bill aims to create a comprehensive regulatory framework for payment stablecoins, emphasizing both federal and state oversight. The Act defines payment stablecoins and sets stringent requirements for issuers, including maintaining reserves, public disclosure of redemption policies, and monthly certifications by registered public accounting firms. It also allows for state-level regulatory regimes, provided they are substantially similar to the federal framework, and includes provisions for transitioning to federal regulation for issuers with significant market capitalization. The GENIUS Act also mandates studies on stablecoins that are backed by another digital asset (i.e. endogenously collateralized stablecoins) and interoperability standards to ensure the stability and security of the financial system.

The Stablecoin Transparency and Accountability Act of 2025 was introduced in the House of Representatives on March 26, 2025. This bill aims to regulate the issuance and management of payment stablecoins to ensure transparency and accountability within the digital asset economy. Key provisions include defining what constitutes a payment stablecoin, establishing requirements for issuers to maintain reserves on a 1:1 basis (i.e. equivalent reserve assets for every stablecoin issued), and mandating monthly disclosures and certifications by registered public accounting firms. The Act also sets forth penalties for non-compliance and outlines the roles of federal and state regulators in overseeing stablecoin issuers. Additionally, the bill prohibits the issuance of endogenously collateralized stablecoins for a two-year period and mandates a study on non-payment stablecoins.

The Securities Clarity Act of 2025 was reintroduced this bill in the House of Representatives in an effort to amend existing securities laws to exclude investment contract assets from the definition of a security. This bill specifically targets digital assets, defining an “investment contract asset” as a fungible digital representation of value that can be transferred without reliance on an intermediary and is recorded on a cryptographically secured public distributed ledger. The Act aims to provide regulatory clarity by ensuring that these digital assets are not classified as securities, thereby exempting them from the regulatory requirements that apply to traditional securities. This legislative move is intended to foster innovation and reduce regulatory burdens on digital asset issuers and investors in digital assets.

Conclusion

This is an exciting time for banking and financial services, full of opportunity but also risk that must be considered and evaluated. For those working in the industry, they should cautiously move forward with the understanding that there will be questions, learning-curves, and delays in adapting an old system to new technology and new assets. However, the demand for digital asset versions of tradition financial services such as payment processing, loans, investments, and other products only continues to grow and provides opportunities for growth and improvement of the industry as a whole.