In a significant move to advance digital asset innovation, a coalition of financial services trade associations has urged the President’s Working Group on Digital Asset Markets to eliminate obstacles preventing financial institutions from engaging in digital asset activities. The group comprises the Bank Policy Institute, American Bankers Association, American Fintech Council, Americas Focus Committee of the Association of Global Custodians, Financial Services Forum, Securities Industry and Financial Markets Association, and The Clearing House Association.
In a joint letter dated May 1, 2025, the associations acknowledged the progress made by the Federal Reserve, the FDIC, and the OCC in rescinding policies that previously hindered banks’ involvement in digital assets. However, they emphasized the need for further action to enhance bank innovation in this sector.
The letter stated, “The U.S. will not be able to achieve a leadership position in digital assets and financial technology under the status quo.” It highlighted the critical role banks play in the financial and payments systems, governed by a comprehensive regulatory framework designed to mitigate inherent risks. Therefore, the associations stressed the importance of federal banking agencies facilitating banks’ ability to engage in digital asset activities.
Investor Identification, Introduction, and negotiation.
To address these challenges, the associations proposed three key recommendations:
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Create Consistent Rules Across Agencies: The federal banking agencies should coordinate to issue joint rules and guidance when possible. If joint guidance isn’t feasible, the agencies should align their policies to avoid conflicting requirements.
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Regulate the Activity, Not the Technology: The agencies should affirm that banks may engage in permissible banking activities regardless of the technology used. A tokenized asset is no different from its traditional form; thus, the regulatory framework should be technology-neutral.
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Set Clear Risk-Management Expectations: Instead of requiring individual institutions to obtain permission from their regulator prior to engaging in digital asset activities, the agencies should issue uniform expectations for how institutions should manage the risks of those activities, including anti-money laundering, capital, and liquidity risks.
These recommendations align with the objectives outlined in the President’s Executive Order on Digital Asset Markets and build upon the associations’ previous letter to the PWG dated February 20, 2025. While the banking agencies have addressed many of the recommendations, the associations continue to urge the Federal Reserve to revise its Policy Statement on Section 9(13) of the Federal Reserve Act and to rescind SR 23-7, “Creation of a Novel Activities Supervision Program.”
The push for regulatory clarity and consistency is not isolated. In February 2025, leading financial services trade associations, including the Bank Policy Institute and the American Bankers Association, voiced strong support for the goals of the President’s Working Group on Digital Asset Markets. They proposed recommendations to bolster U.S. leadership in digital assets by removing obstacles to bank engagement with digital asset activities.
Similarly, in September 2025, the Managed Funds Association (MFA) submitted six high-level recommendations to the Senate Banking Committee to promote a clear, coordinated regulatory framework for digital assets. These recommendations aimed to modernize regulation, support innovation, and preserve the strength of U.S. capital markets.
The collective efforts of these associations underscore a concerted push to create a regulatory environment that fosters innovation while ensuring consumer protection and financial stability. By advocating for consistent rules, technology-neutral regulations, and clear risk-management expectations, they aim to position the United States as a leader in the evolving digital asset landscape.
References
- Financial Associations Recommend Action to Remove Barriers to Digital Assets Innovation – SIFMA
- Financial Associations Recommend Action to Remove Barriers to Digital Assets Innovation – Bank Policy Institute
- Financial Institutions Support Administration’s Effort to Maintain U.S. Leadership in Digital Assets – SIFMA
- Financial Institutions Support Administration’s Effort to Maintain U.S. Leadership in Digital Assets – Bank Policy Institute
- MFA submits digital asset regulation recommendations to Senate Banking Committee – Managed Funds Association
- Financial Innovation and Technology for the 21st Century Act – Wikipedia
- Strengthening American Leadership in Digital Financial Technology – The White House
- ABA, associations offer recommendations for expanding bank engagement with digital assets – ABA Banking Journal
- Press Release: AIMA Calls for Action on Banking Challenges Faced by Crypto Industry – AIMA
- Cambridge Centre for Alternative Finance – Wikipedia
- RESPONSIBLE ADVANCEMENT – U.S. Department of Commerce
- Who’s in? Household-targeted Government Policies and the Role of Financial Literacy in Market Participation – arXiv
- Banking 2.0: The Stablecoin Banking Revolution — How Digital Assets Are Reshaping Global Finance – arXiv
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