US Banks Cautiously Eye Crypto Expansion, Awaiting Regulatory Clarity

• Big banks are cautiously exploring crypto, avoiding first-mover risks.
• Custody and stablecoins are top interests, but clarity is needed.
• Regulatory alignment remains the key to future bank crypto activities.

Large American banks are gingerly venturing into the crypto sector. Even as regulators increasingly give their stamp of approval, these banking behemoths are still hesitant to take the plunge into digital currencies. Rather, they are choosing small-scale pilot projects, alliances, and modest crypto-trading endeavors, according to a number of industry insiders.

The landscape is shifting, and institutions like JPMorgan Chase, Morgan Stanley, and Bank of America are actively discussing crypto-related strategies internally. Yet, many are reluctant to make bold moves without clearer regulatory green lights.

Banks Eye Crypto but Await Regulatory Clarity

Jamie Dimon, CEO of JPMorgan Chase, has reiterated his skepticism toward crypto. While the bank permits clients to purchase Bitcoin, it refuses to offer custody services. “We’re going to allow you to buy it, we’re not going to take custody of it,” Dimon said, likening Bitcoin to smoking; he doesn’t endorse it, but defends one’s right to do it.

Still, the growing interest from regulators, especially under the Trump administration, has reignited discussions within U.S. banks about whether and how to participate in crypto markets. Regulators such as the Office of the Comptroller of the Currency (OCC) and the SEC are sending more favorable signals.

One major area of focus is custody, securely storing and managing crypto assets. While considered promising, the business has thin margins and high regulatory risks. Most banks are considering partnerships with crypto-native firms rather than building custody services in-house.

Some institutions, including Bank of America, have hinted at launching stablecoins if regulatory frameworks become supportive. Meanwhile, conversations around a possible jointly-issued stablecoin among large banks are reportedly in the early stages.

Banks Call for Unified AML and Crypto Rules

Despite improving sentiment, banks are demanding clarity around anti-money laundering (AML) obligations and consistent rules from both market and banking regulators. Legal experts and financial executives say that while the environment is more favorable, uncertainty around compliance still limits progress.

Matthew Biben from law firm King & Spalding said, “Banks will continue to have concerns around AML and regulatory compliance.”

Many large lenders prefer a “fast follower” strategy, waiting for one major firm to enter successfully without regulatory hurdles. If such a precedent is set, others are likely to quickly run pilot programs or scale up small crypto initiatives.

Charles Schwab and Morgan Stanley are already exploring opportunities. Schwab hopes to offer spot crypto trading within a year, and Morgan Stanley is assessing how to be a middleman in crypto-related transactions.

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