On July 30, 2025, the President’s Working Group on Digital Asset Markets (PWG) released “Strengthening American Leadership in Digital Financial Technology,” a comprehensive digital asset report (Report) mandated by President Trump shortly after he took office for his second term. The Report addresses market structure, stablecoins, money laundering, sanctions, and taxation, as well as banking and digital assets. The chapter on banking signals how banks may elect to expand into digital asset custody, trading, and related services in the years ahead.

From Executive Order to Blueprint

The PWG was created by executive order to unify the federal government’s approach to digital assets. Unlike an advisory committee, it operates as a high-level interagency council chaired by the Special Advisor to the President for AI and Crypto, David Sacks, with senior leadership from the U.S. Department of the Treasury, Federal Reserve System, Securities and Exchange Commission, Commodity Futures Trading Commission, and other regulators. 

Because it convenes the nation’s top financial regulators, a PWG report functions as a consensus blueprint. It reflects not only regulatory thinking, but also the administration’s broader strategy — guidance that supervisors across the banking system are expected to follow. Unlike other recommendations included in the Report, those concerning banking can be adopted without legislation. They are therefore more likely to occur, and speedily too. For banks, fintechs, and investors, the Report is the clearest signal yet of where digital asset policy is headed.

How We Got Here: Banks and Digital Assets

For much of the past decade, U.S. regulators took an unpredictable — and increasingly hostile — stance toward digital assets that chilled bank participation. Banks that participated in the digital asset industry at all limited themselves to core services for industry participants, avoiding custody, settlement, and execution.

That changed with the beginning of Trump’s second term. The new administration prioritized digital asset reform and installed experienced leadership to overhaul the regulatory framework. Reflecting that shift, financial regulators have rescinded restrictive guidance and jointly affirmed that banks may engage in digital asset custody and related activities, subject to robust risk management. Recent developments include:

• March and May 2025: The Office of the Comptroller of the Currency (OCC) issued interpretive letters rescinding limits imposed by the prior administration and confirming that banks can buy, sell, and outsource crypto assets and cryptoasset activities.[i]
• March 2025: The Federal Deposit Insurance Corporation (FDIC) rescinded previous guidance, clarifying that “FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets, provided that they adequately manage the associated risks.”[ii]
• April 2025: The Federal Reserve Board (FRB) removed supervisory guidance that discouraged digital asset activities.[iii]
• July 2025: The FRB, OCC, and FDIC issued a joint statement, entitled “Interagency Guidance on Crypto-Asset Safekeeping,” establishing baseline expectations for custody activities.[iv]

Report Recommendations: Toward a Clearer, Technology-Neutral Framework

The Report urges regulators to evaluate banks based on how they manage risks — not on whether products rely on blockchain, tokenization, or other infrastructure. Treating decentralization or blockchain systems as categorically off-limits, it warns, would stifle innovation. 

Key recommendations include:

• Clarifying permissible digital asset activities such as custody, sub-custody, stablecoin reserves, and deposit tokenization
• Finalizing the removal of “reputation risk” as a basis for supervisory criticism by the banking agencies 
• Providing transparency in the process and timeline for obtaining bank charters and Reserve Bank master accounts
• Encouraging state-chartered bank innovation and pilots
• Reviewing the calibration of capital requirements for credit risk, market risk, operational risk, and liquidity risk to incorporate empirical evidence of recent changes in digital asset performance and risk
• Advocating for Basel Committee standards that better align with digital asset risk profiles

In short, regulators are signaling that banks may go deeper into the digital asset industry, providing additional products and services without asking permission and without fear of adverse regulatory consequences, so long as compliance, capital, and risk management match the rigor expected for traditional financial products.[v]

Opportunities Wrapped in Risk: The Legal & Compliance Challenge

Even with these recommendations, the road ahead remains layered with legal and compliance challenges:

• Custody and Capital Treatment: While agencies reaffirm that custody of digital assets is permissible, rules remain unsettled on structure, fiduciary status, and scope. Capital treatment also remains conservative, often classifying digital assets as “high-risk” regardless of volatility or collateral. Until new standards take hold, banks must engage regulators early and design frameworks that balance profitability with compliance.
• Chartering and Master Accounts: Securing charters and Reserve Bank master accounts remains unpredictable, with opaque approval pathways and inconsistent timelines. While the Report calls for greater transparency, institutions should expect continued friction and additional costs until reforms are implemented.
• Third-Party and Partnership Risks: Banks relying on fintech or vendor partners must carefully allocate anti-money laundering, sanctions compliance, disclosure, and reporting duties. Regulators have emphasized that banks cannot outsource compliance accountability; the chartered institution will always be held responsible. That means tightening oversight of counterparties, strengthening contract provisions, and ensuring that controls match regulatory expectations.
• Cross-Border Complexity: Digital assets are traded globally, but U.S. law is limited to the United States. Divergent standards on classification, taxation, and leverage create legal and operational friction. The Report encourages deeper U.S. engagement with international standard-setters. But, until convergence occurs, U.S. institutions must invest in compliance strategies that can operate across multiple jurisdictions.

Litigation and Enforcement: The Critical Overlay

A friendlier regulatory tone does not eliminate litigation or enforcement risk. Supervisors retain broad authority. Failures in custody, disclosure, or risk management can trigger enforcement actions, shareholder claims, and customer suits. Vendor failures and loss events can quickly escalate into private litigation. Robust documentation, controls, and monitoring remain essential safeguards.

The Road Ahead: Building a Durable Framework

The PWG recommendations are the first coordinated federal digital asset strategy — one that unites regulators, policymakers, and enforcement agencies. Even if a future administration takes a different view, it will be far harder to unwind a coordinated interagency framework once supervisory expectations, market practices, and cross-border commitments have been set.

For financial institutions, that means two things:

• Near-term: The window for innovation has never been clearer. Early movers are likely to shape the standards that regulators will refine.
• Long-term: Success requires building programs resilient enough to withstand both regulatory tightening and loosening — recognizing that supervisory intensity may fluctuate — but that market acceptance and demand for digital assets is persistent and increasing.

Footnotes

[i] OCC Interpretive Letter No. 1183 (Mar. 15, 2025) & Interpretive Letter No. 1184 (May 6, 2025).

[ii] FDIC Interpretive Letter No. 7-2025 (Mar. 28, 2025).

[iii] FRB Press Release, “Federal Reserve Board Removes Supervisory Guidance on Digital Asset Activities” (Apr. 24, 2025).

[iv] FRB, OCC, FDIC Joint Statement, “Crypto-Asset Safekeeping by Banking Organizations” (July 14, 2025) at p. 6, n. 8.

[v] PWG Report at 72.