US Government Takes Step to Integrate Crypto Firms with Traditional Banking

The US government is taking steps to open up the banking system to crypto and fintech firms. An executive order signed by President Donald Trump instructs federal regulators to update their rules and clear the way for these companies to work alongside traditional financial institutions.

The Fed's role in this process has come under scrutiny, with the order asking the Federal Reserve's Board of Governors to weigh whether uninsured depository institutions and non-bank financial companies should have direct access to Reserve Bank payment accounts and services. The review also includes examining legal barriers to this access and setting up clear application procedures.

The executive order defines fintech broadly, covering companies offering services tied to digital assets, blockchain infrastructure, payment processing, custody, lending, brokerage, and securities market operations. Regulators have 90 days to act on the directive, which aims to cut unnecessary barriers to entry and encourage cooperation between technology-driven financial companies and federally regulated banks.