Major US Banks Move Into Bitcoin and Stablecoin Services as Regulators Integrate Crypto
Major US banks are expanding Bitcoin services as US regulators integrate cryptocurrencies into mainstream finance. In 2025 Bitcoin (BTC) and Ethereum (ETH) gained formal acceptance as institutional collateral with valuation haircuts and margin rules, enabling leverage, hedging and settlement within regulated frameworks. Fourteen of the top 25 US banks — including JPMorgan Chase, Charles Schwab, American Express and USAA — are building Bitcoin products and adjusting risk systems to handle crypto collateral. Several crypto firms received conditional federal banking status, allowing direct access to national banking rails under federal supervision rather than fragmented state licensing. Stablecoins moved toward stricter federal oversight: dollar-backed tokens now face mandatory reserves, regular reporting and powers for regulators to freeze or seize funds in defined circumstances. Institutional products broadened in 2025 — spot ETFs expanded beyond BTC and ETH to include some altcoins, Ripple launched Ripple USD and J.P. Morgan Asset Management issued tokenized money-market funds — contributing to stablecoin volumes cited at about $4 trillion annually. Market milestones in 2025 included Bitcoin reaching $126,000 in October supported by ETFs and institutional demand, increased derivatives activity and state purchases of BTC for reserves. For traders: expect deeper liquidity, narrower crypto-fi spreads for major banks’ products, potentially higher institutional flows into BTC/ETH and regulated stablecoins, while margin rules and haircuts may reduce extreme leverage-driven volatility but introduce new model risks tied to valuation and regulatory changes.
Bullish
The news is likely bullish for crypto markets, particularly for Bitcoin and Ethereum. Major bank involvement, conditional federal banking access for crypto firms, and clear stablecoin rules lower operational and custody risks, improve liquidity, and encourage institutional capital allocation into digital assets. Historical parallels: U.S. ETF approvals in 2021–2025 and custody integrations previously produced sustained inflows and price appreciation for BTC and ETH. Expanded spot ETFs and regulated stablecoins tend to increase on-chain and off-chain settlement demand, tightening spreads and supporting higher market caps. In the short term, the market may react positively on news (price spikes, volume surges) but could see reduced volatility for major assets as banks and margin rules standardize risk models. In the medium-to-long term, improved infrastructure and federal oversight can underpin larger, more durable institutional investment, supporting higher price floors. Caveats: margin haircuts, valuation rules and potential regulatory actions (freezes, reserve audits) introduce new sources of model risk and could temporarily depress leveraged positions or specific token liquidity. Traders should watch bank product rollouts, collateral haircut levels, and stablecoin reserve reports as triggers for liquidity shifts and volatility.