A proposed crypto market structure bill includes provisions that could significantly broaden the activities banks are legally allowed to pursue with digital assets, according to experts. While lobbyists debate restrictions on crypto rewards resembling yields, the permissibility section may have a larger impact on banking operations. This comes amid ongoing volatility in cryptocurrency markets.
The crypto market structure bill under discussion in Washington aims to clarify and expand the permissible activities for banks and their holding companies involving digital assets. Published on February 24, 2026, reports highlight that this legislation responds to differing regulatory approaches between the Biden and Trump administrations. Under Biden, regulators required banks to consult prudential overseers before engaging in cryptocurrency activities and adopted a cautious stance to limit risks.
In contrast, the bill's authors intend to codify Trump-era guidelines that have already eased restrictions, allowing banks greater involvement in crypto. David Portilla, co-head of Davis Polk's financial institutions practice, noted that statutory authorization provides durability against regulatory shifts. "What we learned between the change of administrations from Trump one to Biden and then Biden to Trump two is that the regulatory actions are not always durable, and so having the statutory authorization would provide that durability," Portilla said. He added that integrating such activities under federal supervision could enhance financial stability.
However, critics argue the bill's broad definition of "digital asset" might create loopholes. Graham Steele, a fellow at the Roosevelt Institute and former Treasury assistant secretary, warned that banks could reclassify impermissible assets by placing them on the blockchain. "All a bank or [bank holding company] would have to do would be put impermissible equities or assets on the blockchain, and it becomes permissible," Steele said. "This seems to potentially open a giant loophole in both the National Bank Act and Bank Holding Company Act restrictions on permissible activities."
Hilary Allen, a bank law professor at American University, echoed these concerns: "It's absolutely something to be concerned about. It essentially eviscerates the banking laws by saying, basically, if you put anything on the blockchain, it inherently becomes a permissible bank activity."
The debate over yield-like rewards has stalled progress, with banks seeking broad prohibitions on crypto firms offering such incentives, while crypto interests push for allowances like subscription programs for stablecoins. A recent White House meeting between stakeholders yielded no public agreement. Meanwhile, bitcoin's price has dropped about 50% since October, mirroring a parallel decline in the overall crypto market value, underscoring the volatility that earlier regulators sought to contain.
