EMBRACING Innovation Banking Digital Assets Beyond GENIUS By KIRSTIN D. KANSKI and ALEX R. SCHOEPHOERSTER, Spencer Fane LLP This year began with an executive order stating the Trump Administration’s policy to establish the U.S. as a global leader in the responsible growth and innovation of digital assets and related blockchain technologies. In July, President Trump signed into law the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), 12 U.S.C. §§ 5901 et seq., which recognized a dual federal-state regulatory framework for payment stablecoin issuers, while also codifying related foundational definitions, such as “money” and “digital assets.” The digital asset ecosystem — and looming regulatory frameworks — are much larger than the issuance and remittance of fully reserved payment stablecoins. On July 31, 2025, the President’s Working Group on Digital Asset Markets released a 160-page report, titled “Strengthening American Leadership in Digital Financial Technology,” which begins: “The American story is one of innovation. From the railroads that linked sea to shining sea, to the internet that connected the entire world, American entrepreneurs have led the buildout of next-generation technologies in every generation since our founding. Crypto should be no different.” Federal Reserve Governor Michelle Bowman, vice chair for supervision, gave a speech on Aug. 19, 2025, at the Wyoming Blockchain Symposium titled “Embracing Innovation,” referencing the “seismic” and transformative shift in society and the banking industry that is underway and the “reframing” of supervision and regulatory mindsets. Recognizing safety and soundness in the banking system will always be the paramount focus, she noted an equal need for the banking industry to innovate to serve its consumers, businesses and communities, and to foster economic growth. Despite past inertia in the adoption of blockchain technologies, Governor Bowman stated, “Change is coming.” Her response to those in banking who express concern about new technologies being a threat to the banking sector was: “We must choose whether to embrace the change and help shape a framework that will be reliable and durable — or stand still and allow new technology to bypass the traditional banking system altogether.” From her perspective, “the choice is clear.” This article provides a high-level overview to inform the question of what “crypto” is, followed by a brief summary of the pending legislation and rulemakings that will continue to add clarity to the ability of banks to engage with the digital asset ecosystem. Lastly, a review of the existing regulatory guidance reveals which activities are currently considered “legally permissible” and within the “business of banking,” culminating in considerations that banks can explore when formulating a long-term strategy as the digital asset ecosystem and the law of permissibility continue to evolve. 20 NEBRASKA INDEPENDENT BANKER
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