U.S. Banks Enter Crypto Sector Amid Trump’s Regulatory Loosening

U.S. banks enter crypto services amid Trump’s regulatory easing, focusing on custody services while facing Fed and NYDFS approval hurdles.

Several large U.S. banks are entering the crypto services sector. The current regulatory liberalization policy under President Donald Trump allows them to operate freely in the market. Yueqi Yang, who operates as a prominent crypto reporter, disclosed this information on her X platform.

Cryptocurrency custody services occupy the majority of attention channels among banks today. Digital asset storage entails safekeeping services for investors through custody systems. This particular service delivers essential value to big institutions as well as large-scale investors.

State Street will start operating digital asset custody services across the world during the next year. An executive from a bank institution verified this recent information. BNY operates bitcoin and ether custody services, which make it the leading competitor to State Street. BNY intends to increase the range of digital tokens available within their service offerings.

Citi continues its exploration into crypto custody services as it holds the position of third-largest U.S. bank based on assets. Citi undertakes the development of these services within its organization but also cooperates with outside companies based on information from bank insiders.

Crypto Trading on Hold as Banks Tackle Compliance Rules

Coinbase is currently negotiating with financial institutions regarding their plan to deliver custody management and trading options. As a strategic initiative, Coinbase works with banks to become joint participants in the cryptocurrency sector.

However, there are major challenges. First, many banks need approval from the Federal Reserve (Fed) and the New York Department of Financial Services (NYDFS). Cryptocurrency trading business remains out of reach for banks when they lack the necessary approvals from authorities.

As a second hurdle, banks need to meet government-imposed capital requirements. Banks need to maintain specific financial reserves as determined by the regulatory rules to effectively handle potential market risks. The process of adherence to these requirements has the potential to delay their entry into cryptocurrency trading.

Even though various obstacles remain, banks demonstrate rising trust in cryptocurrency through their interest in this field. The regulatory updates implemented by President Trump provide a favorable environment that supports this progressive development.

Today the U.S. banking industry moves forward with considerable steps into cryptocurrency solutions. The primary business activity of these institutions centers on developing custody services at this moment. The extension of trading services will likely take place when compliance rules become simpler. Banks will eventually implement complete digital asset adoption.