Major U.S. financial institutions including JPMorgan, Goldman Sachs, and Morgan Stanley are preparing to launch crypto trading services following a pivotal regulatory shift. The move positions traditional banks to directly compete with established digital asset platforms.
- U.S. banks including JPM, GS, and MS are now permitted to offer crypto exchange services under updated OCC guidance.
- The regulatory change enables direct trading, custody, and settlement of BTC-USD and ETH-USD.
- Combined assets of the three banks exceed $3.5 trillion, signaling a major capital influx into crypto markets.
- Analysts project over $40 billion in annual trading volume could shift from crypto-specific platforms to bank-backed services.
- Coinbase (COIN) and PayPal (PYPL) may face intensified competition from regulated, institution-grade alternatives.
- Market reactions include short-term declines in COIN and PYPL shares, with gains in JPM and GS.
A significant regulatory development in December 2025 has cleared the path for major U.S. banks to operate crypto exchange services under federal oversight. This change allows institutions such as JPMorgan Chase (JPM), Goldman Sachs (GS), and Morgan Stanley (MS) to offer custody, trading, and settlement services for digital assets like Bitcoin (BTC-USD) and Ethereum (ETH-USD). The shift marks a turning point in the integration of cryptocurrency into mainstream finance. The regulatory greenlight stems from updated guidance by the Office of the Comptroller of the Currency (OCC), which confirmed that national banks can now provide crypto-related services under existing banking charters. This removes a key legal barrier that had previously restricted banks from offering direct crypto exchange functionality. The move is expected to bring institutional-grade security, liquidity, and regulatory compliance to digital asset trading. With over $3.5 trillion in combined assets under management, JPMorgan, Goldman Sachs, and Morgan Stanley are poised to capture a significant share of the growing crypto market. Analysts estimate that if these banks fully roll out services by mid-2026, they could attract more than $40 billion in new trading volume annually. This would directly challenge companies like Coinbase (COIN) and PayPal (PYPL), which have historically dominated retail and institutional crypto access. The market response has already begun, with shares of COIN and PYPL seeing modest short-term declines, while JPM and GS posted gains following the announcement. The shift could accelerate the mainstream adoption of digital assets, especially among high-net-worth individuals and corporate treasuries seeking regulated alternatives to decentralized platforms.