Trump-Era Moves Bring Crypto and Traditional Finance Closer

Key Highlights: - President Trump advocates for favorable crypto regulation. - Trump Media & Technology Group (DJT) plans to expand into financial services with cryptocurrency investments. - Charles Schwab (SCHW) to hold crypto assets for DJT. - SEC eliminates accounting guidance (SAB 121) that hindered crypto custody by banks. - Industry experts believe this shift will lead to broader crypto acceptance. - Banks await further guidance from regulatory agencies like the Fed, FDIC, and OCC. - Fed Chair Powell expresses caution but supports innovation. - Trump establishes digital assets working group and SEC forms crypto task force. - President Trump launches meme coins for himself and Melania Trump on the Solana blockchain. Overview: The convergence of traditional finance and the cryptocurrency world is accelerating, fueled by President Donald Trump's encouragement of favorable crypto regulation. The latest example is Trump Media's announcement to launch Truth.Fi, a company that will invest in cryptocurrencies and other assets. Charles Schwab will serve as the custodian for these funds. The elimination of SAB 121 by the SEC during Trump's first week in office removed a significant obstacle for banks to offer crypto custody. This move, along with the establishment of a digital assets working group within the executive branch and an SEC crypto task force, signals a shift towards increased integration of crypto into mainstream financial channels. While banks await further guidance from regulatory agencies, industry leaders like Morgan Stanley and Bank of America acknowledge the growing importance of crypto. Experts predict that the acceptance of crypto as a mainstream investment asset will increase, similar to securities and precious metals. President Trump's personal participation in the cryptocurrency industry through the launch of meme coins further highlights his support for its expansion. As Washington continues to shape crypto regulation, it remains to be seen how US banks will navigate this evolving landscape and capitalize on the opportunities it presents.