The US federal banking watchdog flagged a regulatory change that could fundamentally reshape competition in business services across the United States.
That shift became evident today after Bloomberg reported that JPMorgan is exploring cryptocurrency trading services for institutional investors, marking one of the clearest signs yet that Wall Street banks are preparing to move beyond experimentation and into execution. CoinDesk contacted JPMorgan and they declined to comment on the Bloomberg article.
The report follows a statement from a JPMorgan spokesperson, who previously told CoinDesk that the bank was “assimilating and evaluating” recent guidance from the Office of the Comptroller of the Currency (OCC), confirming that national banks can engage in cryptocurrency trading services.
The guidance, published in a Dec. 9 OCC interpretive letter, confirmed that financial institutions can facilitate so-called “risk-free principal” cryptoasset transactions, effectively allowing them to transact cryptocurrency transactions without holding inventory or assuming market risk.
The OCC statement suggests that the regulator intends to bring crypto activity deeper into the regulated banking system and ensure that banks participate rather than sit on the sidelines because, as experts say, if they don’t move now into cryptocurrency trading services, others will.
“The consequences for the market will be significant,” said Burçak Ünsal, managing partner of ÜNSAL Attorneys at Law. He said that “armed with regulatory legitimacy and the confidence that comes with it, banks are prepared to absorb a significant portion of the retail order flow.”
“Independent cryptocurrency exchanges that lack banking licenses will feel competitive pressure, particularly in the entry-level consumer segment,” Ünsal added.
Banks are already testing the waters
Even before the OCC’s latest clarification, several large US banks had begun laying the groundwork for the execution and distribution of cryptocurrencies, often quietly and through intermediaries.
JPMorgan Chase has developed a blockchain-based settlement infrastructure through its Kynexis and JPM Coin platform, while also offering crypto-linked products to institutional clients. Goldman Sachs has restarted its cryptocurrency trading desk, offering bitcoin and ether derivatives, as well as structured products for hedge funds and asset managers. BNY Mellon launched digital asset custody services for select institutional clients, integrating cryptocurrencies into its existing custody and settlement stack.
More recently, banks, including Fidelity-affiliated entities and regional lenders, have partnered with market makers and cryptocurrency exchanges to provide execution, custody, or fiat rails, arrangements that could now expand to direct brokerage models under the OCC’s interpretation.
“This is a green light for banks to offer cryptocurrency brokerage, but not a free pass to do full exchanges or offer all assets to every customer,” said Mati Greenspan, founder of Quantum Economics and former senior analyst at eToro. “Banks can now broker cryptocurrency trades, and that means many everyday users will prefer to buy their bitcoins at their bank rather than, say, Binance.”
A new competitive dynamic
Crypto lawyers and market participants broadly agree that the OCC framework is designed to allow banks to profit from crypto activity while minimizing exposure to volatility.
“Allowing regulated banks to facilitate the execution of cryptocurrencies gives consumers more confidence and removes the friction that has held back widespread adoption,” said Ilies Larbi, founder of Ouinex Exchange. “But it also means that banks could become dominant distribution channels for core crypto exposure, putting pressure on retail-focused exchanges whose primary revenues come from spot trading and custody.”
Larbi noted that banks’ ability to perform “risk-free principal” gives them a structural advantage. “They can earn commissions and offer exposure to cryptocurrencies without holding inventory or taking on market risk,” he said.
That dynamic is putting pressure on U.S.-focused retail exchanges such as Coinbase, Gemini and Kraken, according to Keneabasi Umoren, a cryptocurrency market analyst and Web3 researcher.
“Wall Street can now legally rival crypto exchanges in the most profitable and low-risk part of the market,” Umoren said. “It won’t kill exchanges, but it will reduce US spot trading and custody revenues and drive exchanges into derivatives, DeFi and global markets.”
Kevin Lee, Gate’s chief commercial officer, echoed that sentiment, describing the OCC letter as “validation rather than disruption,” noting that “some volumes that would have gone to standalone platforms will migrate to banking channels over time.”
This would also help traditional wealth management firms meet their clients’ demand for cryptocurrency-related financial services. “For core retail and wealth management clients, it is understandable that many clients prefer to transact within their existing banking relationship,” Lee said.
The move follows a recent survey by Swiss software company Avaloq that found the traditional wealth sector is under increasing pressure to deliver digital assets to wealthy clients.
In the United Arab Emirates, for example, 63% of ultra-wealthy investors have changed managers or are considering doing so, according to that survey.
Just don’t call them trades
Still, many observers expect banks to act cautiously.
“Banks are likely to focus on a small basket of highly liquid assets – bitcoin, ether and regulated stablecoins – rather than the full spectrum of tokens and products that underpin crypto-native exchanges,” Gate’s Lee said. “Launches will be conservative and incremental.”
While experts called the moment a turning point, they stressed that the competition is unlikely to be a zero-sum game. Many banks will continue to rely on crypto-native companies for liquidity, pricing, routing and infrastructure, creating opportunities for partnerships rather than outright displacement.
“Exchanges that are well-capitalized, compliant and global will adapt by pushing the plumbing,” Lee said, “rather than just competing upfront for every retail ticket.”
The OCC has not designated banks as crypto exchanges. But it has essentially declared them open to the cryptocurrency brokerage business, and in a sector where regulatory credibility is in short supply, that alone could prove transformative.
“Basically, Wall Street just got the green light to enter the field,” said Alex Mavashev, founder of ScalerX. “Banks can now sit in the middle of cryptocurrency transactions with regulation and trust behind them. That is a real threat to exchange margins.”
