After the GENIUS Act, should your bank offer cryptocurrency services?
- More banks and financial institutions are exploring offering cryptocurrency services as a result of the GENIUS Act, which created a U.S. regulatory framework for stablecoins.
- Cryptocurrency banking services typically involve either serving as a wallet for consumer banking customers or allowing commercial banking clients to use stablecoins as a fast payment mechanism.
- Banks will need to carefully assess the risks associated with getting involved in the crypto sector, including exposure to financial crimes like money-laundering, pricing volatility, regulatory and compliance challenges and their own institutional capacity.
By passing the GENIUS Act in July 2025, Congress created a regulatory framework for stablecoins. Along with additional changes in the One Big Beautiful Bill Act (OBBB), this represents a significant step toward integrating the cryptocurrency industry into the broader U.S. financial system.
As a result, more banks and other financial institutions are curious whether now is the moment to move into the cryptocurrency space. Keep reading to learn why offering crypto banking services could make sense and how to think about managing the risks involved.
Why should banks consider getting into crypto?
The biggest banks are already actively incorporating crypto into their offerings. JPMorgan Chase recently announced it would allow institutional clients to use Bitcoin and Ethereum as collateral on loans and some banks have also begun partnering with cryptocurrency exchanges or even offering customers the ability to buy and sell cryptocurrency directly through their online banking apps.
Banks are motivated by the growing scale of the crypto industry, which has a market capitalization of over $3 trillion. For mid-market financial institutions curious about following their larger peers into the mix, here are two aspects of crypto adoption to consider.
1. Cryptocurrency is a payment mechanism for commercial clients
Most headlines about crypto focus on consumers buying Bitcoin and other digital assets as investments. But commercial clients are typically more interested in crypto as a tool to move money around via stablecoins.
A stablecoin is a cryptocurrency that is pegged to an asset like the U.S. dollar. Stablecoins are meant to maintain value relative to their backing asset and are often used to quickly facilitate cross-border payments or other financial transactions.
By establishing a regulatory framework for stablecoins, the GENIUS Act has created new confidence in stablecoins as a payment mechanism. As companies look to stablecoins as a faster alternative to existing payment systems like wire transfers or ACH, banks should assess whether their commercial customers would value that option for themselves.
Stablecoins as a payment mechanism are expected to be the lion’s share of the crypto market for banks, so consider your opportunities here. As fintech and payment networks like Stripe evolve by creating their own closed-loop stablecoin payment networks, you can also partner with those networks to generate income and gain insights into customer behavior.
2. Cryptocurrency is an investment for consumer banking clients
Banks are also beginning to offer consumer banking clients the opportunity to buy and sell cryptocurrencies. This marks a shift from an earlier era when mainstream financial institutions looked at cryptocurrency with considerably more skepticism.
For some banks, this could mean partnering with a cryptocurrency or fintech company to make it easier for banking customers to buy or sell crypto. This may involve allowing customers to link their bank accounts or bank-issued debit cards directly to a crypto exchange like Coinbase.
However, some banks are also exploring the idea of serving directly as a crypto wallet for their customers. This would allow customers to trade crypto from inside their online banking portals or apps.
At banks considering crypto offerings to their consumer clients, leaders will also need to determine whether to provide crypto opportunities as a banking service or via a non-banking wealth management option.
What are the risks banks should consider before offering cryptocurrency products or services?
While the GENIUS Act should bring some regulatory stability and clarity to the cryptocurrency industry, it is still a more volatile space than traditional banking. Banks getting into crypto need to consider risks like fraud, money laundering and other financial crimes, as well as whether their employees and systems have the capacity to keep up with the complexities of this ever-evolving asset class.
- Financial crimes: Crypto is frequently used for money laundering or demanded as payment by cybercriminals during ransomware attacks and fraud schemes. And as more institutions adopt crypto, the risk of these activities will likely increase. Institutions will need to carefully monitor and implement anti-money laundering (AML), know your customer (KYC) and Bank Secrecy Act (BSA) rules as they apply to cryptocurrency trades, holdings and transactions.
- Institutional capacity: Crypto moves fast. Banks should carefully consider whether they have the institutional knowledge and systems in place to understand and adapt to the evolving demands and risks of the crypto world before committing to being a part of it.
- Pricing volatility: Unlike traditional currencies or even many stocks, cryptocurrency prices are extremely volatile, with even popular assets like Bitcoin or Ethereum regularly seeing dramatic swings in value within a short period of time. This represents a significant risk for consumer clients who invest in crypto, as well as for institutions that allow consumers to make leveraged investments.
- Impact on liquidity: Banks should consider the potential for market or liquidity risks should consumer clients convert a substantial percentage of their holdings from dollars into cryptocurrencies. This could be exacerbated by banks choosing to offer customer rewards in the form of stablecoins.
- Regulatory and compliance issues: While the GENIUS Act is a step forward, the U.S. still lacks a regulatory framework that offers clear investor protections in the vein of the European markets in crypto-assets (MiCA) rules. Congress is currently working on a market structure bill that could create additional guidance and oversight for the industry as a whole by granting the Commodity Futures Trading Commission additional authority to regulate digital tokens like Bitcoin. Institutions are also waiting on additional guidance and implementing regulations for the GENIUS Act.
- Vendor complications: For banks, crypto adoption may mean partnering with vendors like payment networks or crypto exchanges that may or may not be operating at a high compliance standard. Banks should weigh the risks of third-party partnerships and carefully vet prospective partners to identify potential compliance issues.
How should banks begin to responsibly adopt crypto offerings?
For banks moving to the crypto space, execution can often make the difference between success or failure. To win, you need to develop clear goals, create an enterprise-level plan and mitigate your risks.
Here are four key action steps to follow:
1. Work with an advisor
Your internal team doesn’t know what it doesn’t know. That’s why you need to leverage an external advisor to help you develop and take action on your cryptocurrency strategy.
An outside advisor can walk you through everything: options, risks, planning and implementation. This can be especially useful in the compliance and fraud arena, where you’ll need to keep up with AML, KYC and BSA regulations as they apply to the cryptocurrency space.
Work with an advisor to develop your goals. The right advisor combines a deep knowledge of financial institutions and regulatory compliance with an active understanding of the cryptocurrency space, including how peer banks are adopting crypto to meet their clients’ needs.
2. Consider how you want to offer crypto: Payments or investments?
Banks can offer crypto as a payment mechanism for commercial clients or as an investment for consumer customers. You can do both, of course, but depending on your customer base, it may make sense to prioritize one or the other.
Banks that serve a large number of commercial clients may do better focusing on providing crypto as a payment alternative to wire transfers or ACH. This will be a high-growth area in the wake of the GENIUS Act and may also offer opportunities to partner with fintech payment companies to share data and earn referral or participation fees.
If your customer base is mostly consumer banking, however, you may lean toward developing a crypto wallet within your online banking platform so your customers can buy, sell and hold cryptocurrencies alongside their USD deposits.
3. Assess your vendor options
Mid-market banks won’t typically issue their own cryptocurrencies or develop their own payment networks. Instead, institutions will often partner with fintech companies on crypto-related services.
As you clarify whether you’d rather focus on crypto as a payment mechanism or as an investment, consider the vendor partnerships you might need to make to pursue either avenue. Does a partnership make sense or would you be better off developing a fully internal capacity around a particular service?
From a risk management perspective, it’s also essential that you carefully vet any potential partners. Pay close attention to a potential partner’s compliance, governance and regulatory safeguards.
4. Create an enterprise-level plan and risk assessment
Work with your advisor to create an enterprise-level plan to implement crypto offerings for your clients or customers. This is your roadmap that will lay out where you’re going, how to get there and when it will happen.
Your roadmap should include a thorough risk assessment. Consider the financial, technical, operational, strategic, legal and compliance risks involved with providing the types of services you’re exploring.
Once you’ve identified these risks, you can decide whether and how to add additional tools to manage them responsibly. This may include building out your team, investing in new systems and developing new internal controls.
How Wipfli can help
We help financial institutions grow, manage risks and maintain compliance. Let’s talk about how your bank can responsibly explore cryptocurrency offerings to serve your customers and create new business opportunities. Start a conversation.
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