Wall Street Banks Officially Enter the Market: US Regulations Expand New Landscape for Crypto Trading

The Office of the Comptroller of the Currency (OCC) recently issued an interpretive letter announcing that national banks can engage in “risk-free principal” crypto asset trading activities. This means that banking institutions have gained regulatory legitimacy to facilitate cryptocurrency transactions for clients without bearing market risk or holding inventory, marking further integration between the traditional banking system and the crypto sector.

Banking Giants Accelerate Deployment

According to Bloomberg, JPMorgan has begun preparing a crypto trading service platform for institutional investors. This is no longer an experimental attempt in the crypto space but a formal business decision by Wall Street financial institutions. The participation of banks will bring traditional financial advantages such as capital scale, compliance frameworks, and a client base, which will directly translate into market competitiveness.

Market Competition Landscape Faces Deep Reshaping

Experts believe that the entry of banks into crypto trading will reshape the existing market competition dynamics. With regulatory legitimacy and a foundation of institutional client trust, banks are expected to capture some retail order flow, directly impacting independent crypto exchanges lacking banking licenses. However, industry insiders point out that this competition is not a zero-sum game.

Differentiated Market Mechanisms Are Taking Shape

Banking institutions tend to focus on high-liquidity assets such as Bitcoin, Ethereum, and regulated stablecoins, rather than offering comprehensive crypto token trading. This selective strategy precisely preserves differentiated market space for professional crypto exchanges. Many banks still rely on crypto-native companies to provide liquidity, pricing mechanisms, and underlying infrastructure support, creating new opportunities for collaboration between both parties.

Market observers predict that bank involvement will accelerate the institutionalization of the crypto market and stimulate deep cooperation between traditional finance and the crypto ecosystem.