Cryptocurrency Embraces Financial Institutions: Trump Encourages Adoption
The convergence of traditional finance and the burgeoning world of cryptocurrency intensifies as President Donald Trump advocates for favorable digital asset regulations. Recently, Trump Media & Technology Group (DJT) unveiled plans to foray into financial services with Truth.Fi, allocating up to $250 million in cryptocurrencies and other investments. Charles Schwab (SCHW), a prominent financial giant, will safeguard these funds.
Driven by Trump's administration's repeal of Staff Accounting Bulletin 121 (SAB 121), a regulatory change during Trump's initial week in office, other Wall Street heavyweights may soon join the ranks of crypto custodians. SAB 121 mandated financial institutions to treat crypto as a liability on their balance sheets, rendering it costly for most regulated banks to provide crypto custody.
This shift marks a directional change, paving the way for increased banking giant involvement in digital assets and fostering wider industry acceptance. "Crypto is likely to become a more common investment asset like securities, gold, or other precious metals," said Jeffrey Neuburger, head of the blockchain group at law firm Proskauer.
Despite a cautious approach from the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC), Trump's administration has appointed David Sacks as crypto czar, leading a working group that promotes digital asset growth.
The SEC has also established a "crypto task force" to establish regulatory parameters and support registration. Trump's personal involvement extends to the launch of the official TRUMP and MELANIA meme coins on the Solana blockchain.
US banks explore a wide range of crypto offerings, including exchange-traded funds, stablecoin payments, crypto trading facilitation, and blockchain deposit management. Industry leaders, including Morgan Stanley CEO Ted Pick and Bank of America CEO Brian Moynihan, acknowledge the potential for financial institutions in digital asset custody.
As Trump advocates for crypto expansion, the industry's prominence is expected to rise, prompting banks to enhance their capabilities. David Hollerith, a senior reporter at Yahoo Finance, provides in-depth coverage of the evolving financial landscape, including the intersection of banking and cryptocurrency.