US banks may soon gain wider access to crypto services under the Trump administration.
The Federal Deposit Insurance Corporation (FDIC) plans to overhaul banking rules to allow banks to engage in certain crypto activities, such as custody services and “tokenized deposits,” without prior regulatory approval, according to Barron’s.
During the last major crypto market crash, regulators ensured that major banks had minimal exposure to Bitcoin and other digital assets, which protected them from financial repercussions. However, this dynamic could change in the near future.
After years of regulatory hurdles under the Biden administration, banks could soon get the green light from former President Donald Trump and his team to integrate crypto services. Trump, who has launched his own digital token, appears to be shaping a pro-crypto government, potentially allowing traditional financial institutions to compete with industry majors like Coinbase Global, Robinhood Markets, and BlackRock.
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The FDIC’s planned revisions aim to loosen restrictions that previously required banks to seek regulatory approval before entering the crypto market. Some financial institutions have already begun discussions with policymakers to advocate for offering crypto asset custody and integrating blockchain-based tokenized deposits, according to people familiar with the matter.
Bank of America CEO Brian Moynihan signaled strong interest in the move, telling CNBC at the World Economic Forum in Davos, Switzerland, that banks would embrace the opportunity if regulatory clarity was provided.
Banks currently have a limited presence in the crypto space, but expanding their role to include a broader range of services, such as depositing on blockchains, would be a sharp departure from Biden-era policies. The previous administration actively discouraged banking from having ties to crypto, citing concerns about illicit activity and financial stability risks.
*This is not investment advice.
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