US banks hesitant despite Trump’s pro-crypto stance

US bankers are reportedly adopting a cautious stance on crypto assets despite high expectations of pro-crypto rules under President-elect Donald Trump. Key crypto leaders may already be all-in for bullish reactions to regulation clarity but banks aren’t rushing in yet.

Trump, who emerged as the “Crypto President,” has promised to end the Biden administration’s crackdown on the sector. His win in the US elections has already sent Bitcoin to the moon as the asset’s price hit $103,900 on December 5. Spot BTC ETFs have also recorded around $10 billion of inflow since Trump became president-elect.

Goldman Sachs leads US banks in calls for clarity

According to reports, US bankers are still hesitant about diving into the volatile asset market. Speaking at the Reuters NEXT conference in New York, Goldman Sachs CEO David Solomon made it clear that “the regulatory framework has to evolve.” He added that the Wall Street giant would “evaluate” dealing in top cryptos like Bitcoin and Ethereum if the rules change.

BNY Mellon has started offering crypto custody services to ETFs. However, its CEO Robin Vince highlighted that any new ventures must be tested through macroeconomic cycles before scaling. He added that the market has seen a couple of cycles already in crypto. It will be crucial to see how these assets evolve.

These executives’ comments suggest that the path forward is still unclear and that banks aren’t ready to take major steps just yet.

David Sacks’ SEC role sparks crypto hope

The digital assets market has witnessed stricter regulations under President Biden, which made it challenging for banks to hold crypto tokens. Trump’s entry into office has managed to deliver some hopes of a shift in policy that could boost adoption.

The president-elect recently announced former PayPal executive David Sacks as the Securities and Exchange Commission (SEC). This move has raised expectations among investors but uncertainty remains as Trump still needs to appoint key banking regulators.

The crypto market has seen much turbulence in the last 4 years. The collapse of the biggest crypto-friendly banks (Silvergate and Signature) in less than a week in 2023 ranks high on that list. However, the federal government decided to step up and provide a backstop for depositors of the banks when customers asked for accountability.

Before this, the infamous cases of FTX and Terra Luna proved to be major shockers for the industry. Recently, FTX debtors recovered around $14.5 million in political donations which was tied to Sam Bankman-Fried’s leadership. 

The returns have come from the House Majority PAC ($6 million)  and the Senate Majority PAC ($3 million). The funds will be reportedly used to compensate FTX creditors. Meanwhile, the total asset recoveries exceed $16.5 billion.