The U.S. federal banking regulator has indicated a shift in regulations that could significantly alter competition in trading services across the country.
This shift became evident today when Bloomberg reported that JPMorgan is investigating crypto trading services for institutional investors, representing one of the most explicit signals that Wall Street banks are ready to transition from experimentation to real implementation. CoinDesk reached out to JPMorgan, but they chose not to comment on Bloomberg’s article.
The report comes after a JPMorgan spokesperson previously informed CoinDesk that the bank was “digesting and assessing” recent guidance from the Office of the Comptroller of the Currency (OCC), which confirms that national banks can engage in crypto trading services.
The guidance, reflected in an OCC letter dated Dec. 9 interpretive letter, validates that financial institutions may facilitate so-called “riskless principal” crypto-asset transactions, essentially enabling them to broker crypto trades without maintaining inventory or facing market risk.
The OCC’s statement indicates a regulatory intent to integrate crypto activities more deeply into the regulated banking sector and to ensure banks engage rather than remain passive, as experts indicate that if they don’t enter the crypto trading space now, others will.
“The market effects will be significant,” remarked Burçak Ünsal, managing partner at ÜNSAL Attorneys at Law. He stated that “equipped with regulatory legitimacy and the trust it brings, banks are positioned to capture a substantial amount of retail order flow.”
“Independent crypto exchanges lacking banking licenses will experience competitive pressure, especially at the entry-level consumer segment,” Ünsal added.
Banks are already dipping their toes in
Even prior to the OCC’s recent clarification, several major U.S. banks had begun to lay the groundwork for executing and distributing crypto, often subtly and through intermediaries.
JPMorgan Chase has established blockchain-based settlement infrastructure through its Kynexis platform and JPM Coin, while also providing crypto-linked products to institutional clients. Goldman Sachs has revived its crypto trading desk, offering bitcoin and ether derivatives, alongside structured products to hedge funds and asset managers. BNY Mellon has initiated digital asset custody services for selected institutional clients, weaving crypto into its existing custody and settlement framework.
More recently, banks, including Fidelity-related entities and regional lenders, have collaborated with crypto market makers and exchanges to furnish execution, custody, or fiat rails, partnerships that could now transition into direct brokerage models under the OCC’s interpretation.
“This signals a green light for banks to offer crypto brokering, but it’s not a blanket approval to operate full exchanges or provide every asset to any customer,” explained Mati Greenspan, founder of Quantum Economics and former senior analyst at eToro. “Banks can now broker crypto trades, meaning many everyday users will likely choose to buy their bitcoin from their bank instead of, for instance, Binance.”
A new competitive landscape
Experts in the crypto sector generally agree that the OCC’s framework aims to enable banks to benefit from crypto activities while reducing their exposure to market volatility.
“Permitting regulated banks to facilitate crypto execution enhances consumer trust and alleviates the friction that has hindered mainstream adoption,” stated Ilies Larbi, founder of Ouinex Exchange. “However, it also implies that banks could emerge as dominant distribution channels for basic crypto exposure, putting pressure on retail-focused exchanges that rely heavily on spot trading and custody for revenue.”
Larbi emphasized that banks’ capability to engage in “riskless principal” execution grants them a structural edge. “They can earn fees and provide crypto exposure without holding inventory or taking on market risk,” he added.
This dynamic places pressure on retail exchanges in the U.S., such as Coinbase, Gemini, and Kraken, according to Keneabasi Umoren, a crypto market analyst and Web3 researcher.
“Wall Street can now legally compete with crypto exchanges in the most lucrative, low-risk segment of the market,” Umoren stated. “It won’t eliminate exchanges, but it will tighten U.S. spot-trading and custody revenues and push exchanges further into derivatives, DeFi, and international markets.”
Kevin Lee, chief business officer at Gate, concurred, describing the OCC letter as “validation rather than disruption,” indicating that “some volumes that could have gone to standalone platforms will transition to bank channels over time.”
This would also assist traditional wealth management firms in fulfilling client demand for crypto-related financial services. “For mainstream retail and wealth management clientele, many customers will understandably prefer to transact within their existing banking framework,” Lee mentioned.
This development follows a recent survey by Swiss software company Avaloq showing that the traditional wealth sector is facing increasing pressure to offer digital assets to affluent clients.
In the UAE, for example, 63% of ultra-wealthy investors have either switched managers or are contemplating doing so, according to that survey.
Just don’t label them as exchanges
Nonetheless, numerous observers anticipate that banks will proceed with caution.
“Banks will likely concentrate on a limited array of highly liquid assets, such as bitcoin, ether, and regulated stablecoins, instead of the complete range of tokens and products offered by crypto-native exchanges,” noted Gate’s Lee. “Rollouts will be cautious and slow.”
While experts regard this juncture as a turning point, they emphasize that the competition will not be a zero-sum game. Many banks will continue to depend on crypto-native firms for liquidity, pricing, routing, and infrastructure, paving the way for cooperative opportunities rather than outright replacement.
The OCC has not classified banks as crypto exchanges. Nevertheless, it has effectively opened the door for crypto brokerage operations, and in a landscape where regulatory credibility is scarce, that alone may prove transformative.
“Wall Street essentially received the green light to enter the playing field,” said Alex Mavashev, founder of ScalerX. “Banks can now engage in the middle of crypto trades with regulatory backing and trust. That poses a significant threat to exchange profitability.”
