may want to consider if they want to start preparing for a crypto-friendly environment for their customers. Although the industry is still in its infancy with crypto-assets, there have been a few potential use cases at larger players like JPMorgan and Bank of America that have shown potential to possibly “trickle down” to the community banking space: • Custody Services: Offering custody services for your customers’ crypto-assets may align with some banks’ current Trust Services or Wealth Management divisions. In the early stages, a streamlined approach to this type of service may involve a mutual partnership with a third-party service where the bank acts as the custodian for the asset broker. This approach may be appealing to banks hoping to attract or retain younger customers who already hold crypto-assets but are unsure about the safety or security of the parties safeguarding those assets. • Stablecoin Reserves: Many crypto exchanges and fintech firms (River, for example) attract customers to their platform by holding client assets in full reserve, meaning that for every dollar invested in crypto-assets, they hold a dollar in a cash reserve with a qualified institution. This provides an opportunity for banks to be that institutional partner. With the passing of the GENIUS Act, we expect to see particular interest in stablecoin activity over the coming years. • Crypto-Backed Lending: As crypto-assets continue to become a larger part of consumers’ asset portfolios, customers may have an increased need to convert those less liquid assets into spendable dollars. While lending against direct crypto-asset holdings, such as bitcoin, is likely to be well outside the risk tolerance of most community banks, other crypto-related assets, such as publicly traded crypto-ETFs, may be a viable source of loan collateral; however, robust risk mitigation policies would need to be developed and implemented to ensure the safety and soundness of the activities. Any time a bank is venturing into uncharted territory, a slow, methodical approach is critical. The following are a few actionable insights to help a community bank explore crypto-related activities consistent with FIL-7-2025: • Start with activities that have clearer supervisory lineage. Consider crypto custody, stablecoin reserve services or participation in permissioned networks/INVN for payments — areas referenced by bank regulators and consistent with FIL-7-2025’s framing of potentially permissible activities. These business models also relate directly to the more robust guidance published by the OCC in interpretive letters 1170, 1172 and 1174. • Treat crypto like any other new product — build the risk stack first. Before launch, document product-level risk assessments covering market/price 28 NEBRASKA BANKER
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