Banking Giants Fight to Control Crypto Custody Market Through Regulatory Capture

Major U.S. banking trade groups, including the Bank Policy Institute and the Financial Services Forum, are aggressively lobbying the SEC to designate only banks as 'qualified custodians' for crypto assets, arguing this is necessary for investor protection. This effort is widely viewed by critics as regulatory capture, as these institutions largely ignored crypto during its formative years but now seek to monopolize the custody market by imposing stringent regulatory barriers that crypto-native firms cannot easily meet. The banks claim their long history and regulatory framework make them the 'gold standard,' while downplaying their own systemic risks, such as the 2008 bailout, and citing failures of a few crypto-native custodians as justification for exclusion. The outcome of this lobbying battle will determine whether the future of digital asset infrastructure is controlled by incumbent financial intermediaries or driven by blockchain-native innovation.

(Source：Brave New Coin)