Investment banks are facing a pivotal moment—one that could define their role in financial markets for decades to come. The catalyst is a sweeping new roadmap released by the President’s Working Group on Digital Asset Markets, outlining how the United States plans to “usher in the Golden Age of Crypto.”
With firm backing from the Trump Administration, the report lays out a bold path toward embedding blockchain, stablecoins, and decentralized finance (DeFi) into the foundation of the country’s financial infrastructure. For investment banks, the signal from Washington is now clear: digital assets are no longer niche, they are policy.
The July 30 report, mandated by President Trump’s Executive Order 14178, is part of a broader push to make America “the crypto capital of the world”. It calls for both legislative action and immediate regulatory changes.
Salman Banaei, General Counsel of Plume and former senior special counsel at the SEC, described the report as a clear validation of ongoing efforts to modernize capital markets infrastructure.
“A bipartisan consensus in the US, and increasingly other countries, are recognizing the power of open blockchains to support exporting their currency and capital markets,” he told Traders Magazine.
Banaei said that the report aligns with goals his company and others have long advocated for, emphasizing the importance of compliance, safety, and transparency in bringing capital markets on-chain.
The report urges regulators like the SEC and CFTC to use their existing authorities to create flexible pathways for institutions to register, offer custody, trade assets, and experiment with new financial products under safe harbor or sandbox structures. It also encourages Congress to expand the CFTC’s jurisdiction to cover non-security digital asset spot markets and to pass laws welcoming DeFi into the regulated financial system.
For Wall Street, these recommendations could reshape market dynamics in profound ways. The report suggests allowing more vertically integrated business models, a nod to the streamlined architecture of blockchain networks. This means broker-dealers, investment advisers, and exchanges could soon combine roles in ways that mirror how DeFi protocols operate. For investment banks, this could erode long-standing structural barriers and introduce new forms of competition.
As Banaei noted, the PWG’s recommendation could allow investment banks registered as broker-dealers to “move upstream into exchange and other financial services,” mirroring the vertically integrated models seen in DeFi protocols.
Banaei explained that previous administrations focused heavily on the risks—hacks, disruption, and fear of change—which kept investment banks from adopting new fintech, particularly open blockchain technology. “The last Administration fixated on fear… The PWG report changes this dynamic. It opens the door for investment banks to adopt the same blockchain infrastructure that has powered DeFi, and to compete with it,” he said.
Some banks are already moving forward, according to Banaei. JP Morgan’s partnership with Coinbase reflects a growing willingness among major banks to collaborate with crypto-native firms. The withdrawal of restrictive SEC guidance like SAB 121, combined with new recommendations on risk-based capital rules for digital asset activities, is clearing a path for more such partnerships, he said.
Tokenization, Stablecoins, and the Race to Modernize
Roy Ben-Hur, managing director and digital assets financial services leader at Deloitte, noted that investment banks are actively discussing how tokenization could streamline access to investment products such as money market funds and private placements. “There’s also growing interest in how blockchain can help expand participation in new asset classes, like tokenized shares of private companies,” he said.
Ben-Hur emphasized that many banks are focusing on aligning product planning and risk management with evolving regulatory expectations while closing operational gaps in KYC, AML, transaction monitoring, and staff training.
As Ben-Hur observed, investment banks have begun accelerating strategy conversations around tokenization as a way to streamline access to investment products and modernize internal processes. Similarly, stablecoins are gaining traction in institutional planning, not just for crypto transactions but as infrastructure to improve cross-border payments and replace aging settlement systems.
Duane Block, who leads Accenture’s digital assets work, said that these conversations are now priorities at the highest levels of banking leadership. “Digital asset strategies have become boardroom imperatives. The current administration’s policy has been a major catalyst in elevating digital asset initiatives from private experiments to earnings call commitments,” he said.
Block also observed: “A classic continuum appears to be emerging, from intrigue and optimism with tokenized assets to caution and skepticism with decentralized finance.”
Despite growing enthusiasm, operational and compliance challenges remain. Banks need to strengthen their anti-money laundering protocols, revamp transaction monitoring, bolster cybersecurity defenses, and train staff on the risks and mechanics of digital assets.
Ben-Hur emphasized the importance of these improvements, saying: “Before banks can fully enter digital asset markets, they need to close key gaps in areas like KYC, AML, and internal controls. Addressing these gaps is essential for both regulatory compliance and long-term trust.”
While tokenization and stablecoins attract strong interest, many banks remain cautious about DeFi. Concepts like staking and automated market makers are viewed as complex and potentially risky under current regulatory standards.
Block described this cautious stance, noting: “There’s intrigue and optimism with tokenized assets, but caution and skepticism with decentralized finance.” Still, the PWG report marks a policy shift by treating DeFi as a legitimate area of financial innovation. It recommends that regulators tailor obligations to DeFi’s unique characteristics, rather than forcing it to conform to legacy rules.
Banaei said this inclusion of DeFi will accelerate competitive pressures. “Allowing DeFi into the regulatory perimeter will draw the power of FOMO among investment banks,” he said. “It will force institutions to evaluate where they should build, where they should buy, and where they should partner.”
This dynamic is already visible in the market. Mergers and acquisitions between banks and crypto-native firms are expected to accelerate, especially in custody, tokenization, and stablecoin infrastructure. Ben-Hur said banks may find acquisitions faster than internal development to scale capabilities, while some crypto firms might acquire legacy players for licenses and market access.
Despite new competition, investment banks hold major advantages: regulatory experience, deep client relationships, and trusted custody infrastructure. Banaei said these strengths will only last if banks modernize. “Banks have an enormous advantage in already being the home for Americans’ deposits,” he said. “If they can harness stablecoins and on-chain market infrastructure to offer faster, cheaper, more transparent services, they can not only defend but grow their market share,” he concluded.
