By Matt L’Heureux, Chief Innovation Officer
It Feels Different this Time
Price movement helps. The crypto winter has thawed. When Bitcoin tops $100k, the crypto space gets more attention from outsiders. But the real shift is coming from Washington.
Back in 2022-23, COCC developed a digital banking capability to allow community banks and credit unions to offer crypto trades and custody within their digital banking solution. But regulatory obstacles at the time forced a cancellation of that product release. Oh, how the climate has changed.
A new administration has ushered in a dramatically more crypto-friendly environment.
Executive actions have paused federal crackdowns – and, in a striking shift, the federal government is now actively exploring the creation of a national Bitcoin reserve. That’s right: the U.S. Treasury is evaluating how Bitcoin might serve as part of its broader strategic asset mix.
At the state level, several legislatures are following suit. Bills have been introduced that would allow states to allocate Bitcoin reserves as part of treasury diversification efforts signaling that digital assets are being taken seriously as long-term economic infrastructure, not just speculative plays.
The SEC recently rolled back its previous guidance that required banks to hold crypto assets in custody on their balance sheets. This removes a major capital hurdle that effectively blocked many banks from entering the space – and it signals a broader shift toward regulatory frameworks that accommodate, rather than stifle, responsible innovation.
At the same time, landmark legislation is making real progress. The GENIUS Act, for example, has bipartisan support and aims to establish a comprehensive regulatory framework for payment stablecoins – setting standards for reserve backing, who can issue them, and how they’re supervised. If passed, these rules could open the door for banks and credit unions to participate in stablecoin ecosystems.
The Spotlight Shifts to Stablecoins
Bitcoin may still dominate global headlines, but stablecoins are where the real movement is – and where traditional finance is quietly starting to place its bets.
- Federal legislation will soon define how reserve-backed stablecoins can be issued, by whom, and under what oversight.
- JPMorgan Chase announced the launch of the JPMD “deposit token” for institutional clients, to operate on Coinbase’s Base public blockchain.
- Circle’s USDC continues to gain traction with institutional partnerships and a push for greater transparency.
- Fiserv will launch a digital asset platform – in partnership with Circle – enabling community financial institutions to process stablecoin transactions via an ecosystem including a stablecoin orchestration layer, an underlying digital asset account ledger, connections to payment rails (e.g. PayPal and MasterCard), integration with their XD digital banking platform, and even capabilities to issue new stablecoins.
What Now?
The crypto landscape is evolving quickly, but it is not without financial or operational risk.
Rather than diving in prematurely, as an industry, community financial institutions should be watching the regulatory environment and continuing conversations to consider how digital assets might (or might not) fit into their long-term strategy.
You don’t need to become crypto-native overnight. But you do need to keep crypto in the room. Use this time to learn, ask questions, and get comfortable with where technology and finance are heading.
It won’t remain optional – not when consumers, businesses, institutions, and competitors are all moving toward digital assets.
The most important move right now for community banks and credit unions is to bring digital assets into your strategic conversations. Consider how it intersects with your payments strategy. Evaluate your institution’s readiness for digital asset custody. And explore potential partnerships.
Crypto isn’t going away. And neither is your relevance – so long as you stay engaged. It’s time to focus on practical use cases, risk exposure, and cost implications as we all navigate stablecoins’ entry into mainstream banking.
