A coalition of financial services trade associations has urged the President’s Working Group on Digital Asset Markets to support the removal of barriers hindering financial institutions from engaging in digital asset activities. This coalition 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 their joint letter, the associations recognize the progress made by the Federal Reserve, the FDIC, and the OCC in rescinding policies that have hindered banks' engagement in digital assets. They also recommended further measures to encourage bank innovation.
The letter states, “The U.S. will not be able to achieve a leadership position in digital assets and financial technology under the status quo.” It emphasizes the critical role banks play in financial systems and the need for policies that support their participation in digital asset activities.
The associations provided three key recommendations. Firstly, to create consistent rules across agencies by coordinating joint rules and guidance. If joint guidance is not feasible, they advocate for at least the alignment of policies to avoid conflicting requirements.
Secondly, they recommend regulating the activity rather than the technology, ensuring that banks can engage in activities regardless of the technology used, treating tokenized assets like their traditional counterparts.
Thirdly, they advise setting clear risk-management expectations. The agencies should provide uniform expectations for managing risks associated with digital asset activities instead of requiring individual permissions from regulators.
These recommendations align with the goals outlined in the President’s Executive Order on Digital Asset Markets and build on a previous letter dated February 20, 2025. Despite some progress, the associations 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.”
For those interested, a copy of the letter is available.
The release provides descriptions of the involved organizations, detailing their roles and missions in the financial sector.