US Bank Crypto Rules Remain in Limbo as Congress and Regulators Weigh In
The fate of U.S. bank crypto rules remains uncertain as Congress and regulators continue to weigh in on the issue. A recent Congressional Research Service report outlined three possible approaches: making rules more durable through legislation, allowing regulators to assess risks tied to specific activities, or a mix of both. The question extends to custody, stablecoin services, and ledger-based transactions by banks and their subsidiaries.
Banks generally have the ability to conduct activities related or incidental to the business of banking, but regulators differ on how crypto activities fit within these tests. In March, the Office of the Comptroller of the Currency reaffirmed that national banks and federal savings associations could conduct certain crypto custody, stablecoin, and distributed-ledger activities. However, the agency ended a prior supervisory non-objection process for these activities.
Congress has addressed parts of the issue through various proposals. The GENIUS Act made stablecoin issuance, custody, and related activities permissible for bank subsidiaries. The House-passed CLARITY Act would allow banks to use a digital asset or blockchain when carrying out an activity already allowed by law. The Senate-reported text would separately authorize 11 types of crypto activity for banking organizations and credit unions.
The proposals cover different institutions and activities, leaving lawmakers to choose among leaving authority with regulators, setting statutory rules, or dividing the role between Congress and agencies.