US Fed to soften tough stance on digital assets after Donald Trump fully embraces crypto: Wall Street analysts

The US Federal Reserve and the Office of the Comptroller of the Currency (OCC)– America's top banking regulators — may soon loosen their tough stance on digital assets now that US President Donald Trump has fully embraced the cryptocurrency industry. According to a report by On The Money, officials at top US banks, namely JP Morgan and Bank of America, are growing more optimistic that the policy regulators will soften their long-held anti-crypto stance. 

Wall Street analysts expect to be providing even basic services to crypto clients such as holding digital assets in custody, even buying bitcoin exchange-traded funds at their branches. The change in sentiment at the bank’s officials began with Trump’s courting of the $3.5 trillion crypto business and its top executives, and promising to end the Biden-era regulatory assault on the crypto industry.

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US Fed, OCC officials to soften stance on digital assets?

Now that the Trump Administration is fully embracing crypto, Congress is taking steps to push through legislation for a new regulatory framework for digital assets. According to the report, bankers say they expect the US Fed to get clearance to jump into the crypto business in ways they couldn’t in the past.

Bankers expect to be getting the green light to do more crypto business in short order given Trump’s mandate to make the US the crypto capital of the world. “I’m confident we’ll see some encouraging guidance from the US Fed and the OCC in the coming months,” said an executive at Bank of America (BofA). 

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Bitcoin, the world’s largest and most popular digital coin — is experiencing a significant post-election rally. Bitcoin is up nearly 124 per cent in a year, trading close to $100,000. Crypto is also considered a volatile and risky asset. Some banking analysts worry that wild swings could jeopardize the banking system depending on the size and scale of the bank’s crypto business going forward.

Last week, US Fed chairman Jerome Powell said in his post US Fed policy-press conference that banks are “perfectly able” to serve crypto customers, and doesn’t want to take actions that would cause banks to “debank” or cancel customers who are crypto centric because of excess risk aversion.

Meanwhile, on Thursday, Trump Media and Technology Group Corp. applied to trademark brands for six investment products that track Bitcoin and the US manufacturing and energy sectors. These themes are US President Donald Trump’s priorities in office. The company has yet to file for all six products with the US market regulator, the US Securities and Exchange Commission (SEC).

The money-losing social media company is looking to debut the “Truth.Fi Made in America ETF,” “Truth.Fi US Energy Independence ETF” and “Truth.Fi Bitcoin Plus ETF,” along with three other vehicles called separately managed accounts with the same themes on its recently announced Truth.Fi financial platform, subject to regulatory approval.

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