that national banks may “buy and sell” assets that are held in custody at the direction of a customer. On July 14, 2025, the Federal Reserve, FDIC, and OCC issued a joint statement reiterating the importance of risk management and confirming that banks providing custody (safekeeping) services for digital assets are expected to comply with all applicable laws, regulations and fiduciary requirements. Forward-Looking Strategy The banking industry is justifiably trying to understand its role in the burgeoning digital assets ecosystem that has largely been developing around it. After all, Nakamoto’s white paper, which initiated the revolution, began with the recognition that commerce online has “come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments,” and concludes by proposing the design of a system that need not rely on such intermediaries. A good starting point for any strategy would be to review the Working Group’s recommendations targeted at the banking industry and its regulators. Earlier this year, Acting Chairman Travis Hill stated that “looking forward,” the FDIC was “actively reevaluating [its] supervisory approach to crypto-related activities. This includes … providing a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles.” Similarly, OCC Acting Comptroller Rodney Hood included “accelerating bank-fintech partnerships” and “expanding responsible engagement with digital assets” as two of the agency’s top four priority strategies for the industry in his remarks to the U.S. Chamber of Commerce Capital Markets forum on June 3, 2025. In addition to gathering industry feedback from community banks on their ability to leverage digital technology, the OCC launched a “Digitalization: Resources for Community Banks” website earlier this year, which compiles resources specific to community banks on topics such as safety and soundness, risk management and guidance related to emerging technologies. Governor Bowman concluded in her recent remarks on Embracing Innovation: “We stand at a crossroads: We can either seize the opportunity to shape the future or risk being left behind. By embracing innovation with a principled approach, we can define the course of history and fulfill our responsibility to promote the safety and soundness of the banking system and financial stability. … Innovation and regulation don’t need to be on opposite ends of the spectrum. In fact, they complement each other. A more modern, efficient and effective financial system furthers key regulatory objectives — promoting safe and sound banking operation, financial stability and economic growth.” With a macro-view in mind, the broader questions facing the banking industry are not whether to issue a stablecoin and when banks will be “disintermediated” out of payments. All banks are wise to begin formulating institution-specific strategies with both a short-term view (think stablecoin) and a long-term view (think bitcoin, tokenization, blockchain and the digital assets ecosystem). The wide array of variabilities taking shape as impacting the banking industry includes, but is not limited to: • Centralized vs. decentralized strategies; • Issuing stablecoins vs. banking payment stablecoin reserves; • Public vs. private blockchain solutions; • Cross-industry blockchain technologies to be deployed domestically or globally; • Tokenized assets and deposits; • Intra-bank distributed ledger functionality; • Fully reserved strategies that may remove the need for deposit insurance; • Direct and third-party custodial solutions; • Corporate treasury products and related strategies; • Collateralization of digital assets; and • Evolving customer expectations and demands that can impact deposit bases. If nothing else, now is the time to learn and lean into a rapidly developing regulatory framework, allowing banks to participate and avoid becoming disintermediated. Many of the largest banks have publicly announced their involvement in the digital asset ecosystem. Some have already been incubating blockchain strategies for years. Embracing innovation through informed strategy is no longer limited to innovators and early adopters. The time is now to craft a digital asset strategy or risk being left behind. Kirstin D. Kanski maintains a comprehensive banking and financial services practice, providing strategic legal advice to financial institutions on a variety of bank regulatory, compliance, governance and enforcement matters. She is also a member of the firm’s Bitcoin, Blockchain and Digital Assets team and can be contacted at kkanski@spencerfane.com. Alex R. Schoephoerster is a corporate transactional attorney in the St. Cloud, Minnesota, office of Spencer Fane, advising business clients in the bitcoin, mining and blockchain industries. He is also a member of the firm’s Bitcoin, Blockchain and Digital Assets team and can be contacted at aschoephoerster@spencerfane.com. NEBRASKA INDEPENDENT BANKER 23
RkJQdWJsaXNoZXIy MTg3NDExNQ==