Major U.S. banks are conducting internal discussions about cryptocurrency expansion as regulatory support strengthens, but their initial approach will remain cautious through pilot programs and limited trading activities. Four industry executives confirmed that Wall Street's largest institutions, previously restricted by stringent regulations, are positioned for rapid growth in digital assets while maintaining hesitant approaches to avoid regulatory missteps.
What to Know:
- Big banks plan tentative crypto entry through partnerships and pilot programs rather than full-scale expansion
- JPMorgan CEO Jamie Dimon ruled out cryptocurrency custody services despite allowing client bitcoin purchases
- Trump administration signals more favorable crypto policies while banks seek clearer anti-money laundering guidelines
Regulatory Landscape Shifts
The hesitation among major lenders stems from concerns about being first movers in an evolving regulatory environment. Banking executives, who requested anonymity due to internal planning discussions, indicated that institutions prefer waiting for successful test cases before committing resources.
"When I look at the bitcoin universe, the leverage in the system, the misuse in the system, the money laundering issues, trafficking, I'm not a fan of it," JPMorgan Chase CEO Jamie Dimon told investors last week. The nation's largest bank leader compared cryptocurrency access to smoking rights. "We're going to allow you to buy it, we're not going to custody it," Dimon added.
President Donald Trump's campaign promise to become the first "crypto president" has materialized through White House meetings with industry leaders and pledges for strategic bitcoin reserves. His administration's regulatory appointments have created more favorable conditions for traditional financial institutions.
Charles Schwab CEO Rick Wurster described regulatory signals as "pretty green" for large firms entering cryptocurrency markets. The brokerage plans to offer spot crypto trading within twelve months, reinforcing confidence in the shifting regulatory landscape.
Strategic Partnerships and Pilot Programs
Banking sources indicate that custody businesses for storing and managing crypto assets represent promising opportunities despite thin profit margins and elevated risk profiles. Most institutions plan to enter custody services through partnerships with established cryptocurrency firms rather than building internal capabilities.
The Office of the Comptroller of the Currency has cleared pathways for banks to engage in specific crypto activities including custody services, stablecoin operations, and distributed ledger network participation. The Securities and Exchange Commission eliminated previous accounting guidance that made cryptocurrency dealings expensive for traditional banks.
Bank of America CEO Brian Moynihan suggested his institution could launch stablecoins if regulations permit broader cryptocurrency adoption for payment systems. Morgan Stanley CEO Ted Pick expressed interest in serving as an intermediary for crypto-related transactions while exploring integration with the bank's e-trading platform.
Multiple large banks are exploring joint stablecoin issuance, according to banking sources, though conversations remain in preliminary stages. These collaborative approaches reflect institutional preferences for shared risk and regulatory compliance costs.
Dario de Martino, an M&A partner at A&O Shearman who works on crypto-related issues, noted that regulatory stance shifts encourage traditional lenders while maintaining cautious approaches. "They are still approaching it with caution and viewing the changes in regulation as an opportunity to engage and not a free pass," de Martino said.
Compliance Concerns Persist
Banks continue seeking clarity around anti-money laundering regulations and supervisory expectations before deeper cryptocurrency engagement. Industry executives emphasize the need for consistent guidelines across banking and market regulators before launching digital asset businesses subject to volatile valuations.
Matthew Biben, co-head of King & Spalding's global financial services group, acknowledged improved conditions while noting persistent compliance concerns. "Banks will continue to have concerns around anti-money laundering and regulatory compliance," Biben said.
Banking sources indicated that institutions want definitive answers about cryptocurrency lending permissions and market-making authorization for digital assets. Traditional banking operates under well-defined regulatory frameworks, and similar clarity is needed for digital asset operations.
The Trump administration's crypto working group under appointed czar David Sacks lacks banking regulator representation, according to two banking sources who consider this oversight problematic for meaningful industry participation.
Current approaches center on small-scale pilot programs while institutions evaluate broader cryptocurrency prospects. Banks are positioning themselves as fast followers rather than pioneers, waiting for regulatory certainty and successful precedents before major commitments.
Closing Thoughts
Major U.S. banks are preparing cautious entry into cryptocurrency markets through partnerships and pilot programs while awaiting comprehensive regulatory guidance. The combination of Trump administration support and evolving regulatory frameworks creates opportunities, but institutions remain hesitant to lead major expansions without clearer anti-money laundering rules and consistent supervisory expectations.