A former chair of the U.S. Commodity Futures Trading Commission (CFTC) warned that regulatory uncertainty is constraining U.S. banks more than crypto-native firms, risking a competitive setback against international peers that are moving ahead with clearer digital asset frameworks.
Banks Seek Clear Rules on Digital Assets
The former CFTC chief said the lack of consistent, bank-specific guidance on activities such as digital asset custody, tokenized deposits, blockchain-based settlement, and stablecoin-related payments has left U.S. lenders hesitant to build services. By contrast, many crypto-native companies operate under state or money services regimes that, while imperfect, provide more defined guardrails for certain activities.
Bank executives have repeatedly cited fragmented oversight from multiple federal banking regulators and uncertainty over how capital, liquidity, and operational risk rules apply to digital asset activities. They also point to accounting treatment for safeguarding crypto assets and questions around the permissibility of engaging with public blockchains, both of which can raise costs or stall product launches.
Global Peers Press Ahead
Outside the United States, policymakers have advanced clearer, sector-wide frameworks that directly address bank participation in digital assets. The European Union’s Markets in Crypto-Assets (MiCA) regime is taking effect in phases, while the Basel Committee has finalized standards for banks’ crypto-asset exposures. Financial hubs including the United Kingdom, Singapore, and Hong Kong have issued detailed licensing regimes and supervisory guidance covering custody, tokenization pilots, and, in some cases, stablecoin issuance and use in payments.
This divergence has encouraged non-U.S. financial institutions to experiment with tokenized securities, on-chain collateral, and blockchain-based settlement, often in regulatory sandboxes or with explicit supervisory oversight. The former CFTC chair argued that without comparable clarity, U.S. banks may forfeit leadership in areas where existing compliance infrastructure and client relationships could be advantages.
Patchwork Policy in the U.S.
In the U.S., federal banking agencies have issued statements emphasizing safety-and-soundness risks tied to crypto activities, leading many banks to seek case-by-case approval for new offerings. Meanwhile, securities and commodities regulators continue to apply existing laws to digital assets, but comprehensive federal legislation remains pending. Congressional debates over market structure and stablecoin oversight have yet to produce a unified framework governing how insured depository institutions can custody, tokenize, or transact with digital assets at scale.
The resulting uncertainty has slowed banks’ participation in tokenization projects and limited their ability to compete with fintechs and foreign banks on services such as institutional crypto custody, tokenized money market funds, and blockchain-based payment rails.
Why It Matters
Clear, consistent rules for banks could accelerate institutional adoption of blockchain technologies while preserving consumer protections and financial stability safeguards. According to the former CFTC leader, the longer the U.S. delays, the more likely global market structure, standards, and network effects will be set elsewhere—potentially diminishing U.S. influence over cross-border finance and the evolution of digital asset markets.
Policymakers continue to weigh bank-engagement models for stablecoins, tokenized assets, and on-chain settlement. Market participants are watching for progress on federal legislation and coordinated guidance from banking regulators that could provide the clarity banks say they need to compete globally in digital finance.
