Crypto firms are moving forward with efforts to integrate more formally into the U.S. banking system, even as market, regulatory, and public dynamics continue to shift. In a new insight, Director of Financial Services Policy Thomas Kingsley explains why important concerns remain about supervisory consistency, regulatory arbitrage, and when trust-charter activities become functionally equivalent to banking.

He concludes:

The dream is simple: Perform bank-like activities with limited bank-like supervision, regulation, or capital requirements. Crypto firms’ efforts to secure bank and trust charters represent a persistent, strategic attempt to bridge the divide between digital-asset innovation and traditional banking regulation. While regulators remain cautious, industry demand for clearer supervisory pathways is unlikely to diminish. The outcome of this prolonged engagement will shape not only the market for digital-asset services but also the broader evolution of the U.S. regulatory framework as it confronts technologies that challenge long-standing definitions of banking, trust services, and financial intermediation.

Read the analysis.