Legislative Proposal Would Grant Banks Authority to Hold Digital Assets and Issue Stablecoins

Congress is considering legislation that would permit banks and credit unions to hold cryptocurrencies and issue stablecoins, representing a shift from current guidance-based frameworks to statutory authorization. The proposal builds on the foundation of the GENIUS Act, which established a payment stablecoin framework for the United States. Such approval could significantly expand institutional participation in digital asset markets and strengthen the integration of cryptocurrencies into traditional banking.

Congress is evaluating a new legislative framework that would fundamentally change how depository institutions interact with digital assets. Rather than relying on regulatory guidance and interpretive letters, banks and credit unions would receive explicit statutory authorization to custody cryptocurrencies and create stablecoins. This represents a formalization of activities that have existed in a legal gray area, building upon previous legislative work like the GENIUS Act that created a specific payment stablecoin model.

The shift from guidance-based to statutory permission could lower legal barriers for financial institutions considering cryptocurrency services. Federally insured institutions have previously hesitated to enter this space due to regulatory uncertainty. With clear legislative backing, major banks may feel more confident developing digital asset capabilities and offering related products to their customers.