Here's what's happening at the intersection of banking and Bitcoin:
🏛️ Federal Reserve Removes "Reputational Risk" from Bank Examinations
The Federal Reserve Board announced that reputational risk will no longer be a component of examination programs in its supervision of banks. This significant policy shift moves toward more objective, specific financial risk assessments rather than subjective reputational concerns. The change could create a more predictable regulatory environment for banks exploring Bitcoin services, as examinations will focus on concrete financial risks rather than perception-based evaluations.
🏠 FHFA Orders Fannie Mae and Freddie Mac to Consider Bitcoin as Mortgage Asset
In a groundbreaking directive, the Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to prepare proposals for considering Bitcoin as an asset for single-family mortgage loan risk assessments. The order recognizes Bitcoin as "an emerging asset class that may offer an opportunity to build wealth outside of the stock and bond market" and directs the enterprises to assess Bitcoin reserves without requiring conversion to U.S. dollars prior to loan closing.
📈 SEC Begins Reversing "War on Cash" - Moves Toward Direct Securities Ownership
The SEC has officially begun reversing decades of policies that pushed investors away from direct ownership of securities. This shift moves away from the intermediated system created by UCC Article 8 in 1994, which turned stocks into IOUs rather than directly-held property. The move toward "natively-digital" securities reduces systemic risk and allows the financial system to finally enter the internet age, with significant implications for Bitcoin and digital asset custody models.
🇩🇪 Deutsche Bank Launches Bitcoin Custody Services
Germany's largest bank, Deutsche Bank plans to launch Bitcoin and crypto custody services. This marks a major milestone as one of Europe's largest financial institutions enters the Bitcoin custody space, following the broader trend of traditional banks embracing digital asset services. The move signals growing institutional confidence in Bitcoin infrastructure across international markets.
🏦 Major Banks Eye Bitcoin Custody Push
BNY Mellon, State Street, JPMorgan Chase, and Citi will offer custody next year, according to Galaxy Research predictions. With the four banks holding more than $12 trillion in AUM and a friendly regulatory environment offering the banks a pathway to custody, this could represent the largest institutional Bitcoin custody expansion to date.
🔍 Wrap-up
The regulatory landscape continues to evolve favorably for Bitcoin banking integration. From the Fed's move away from subjective reputational risk assessments to major international banks launching custody services, we're witnessing the infrastructure foundation being laid for mainstream Bitcoin banking adoption. The convergence of regulatory clarity, institutional demand, and technological maturity is creating unprecedented opportunities for Bitcoin-focused financial services.
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