Bank of America Predicts Multi-Year Transition of Banks to Blockchain

U.S. banks are preparing for a gradual but lasting shift toward blockchain-based finance, according to Bank of America.

In a research report released Monday, the firm observed that regulatory discussions on crypto are gradually giving way to concrete implementation, thereby setting the stage for banks to shift more activity on-chain in the coming years.

This transition, Bank of America said, is being shaped directly by U.S. banking regulators, who are beginning to define how stablecoins and tokenized deposits can function within the traditional financial system.

Regulation Moves From Planning to Execution

According to Bank of America analysts led by Ebrahim Poonawala, regulatory momentum is now clearly visible.

For instance, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corp. (FDIC), and the Federal Reserve are jointly outlining standards for digital-asset activity.

Rather than broad policy signals, the report indicated that recent actions demonstrate practical rulemaking. This marks the beginning of a multi-year shift that could bring payments and real-world assets onto blockchain infrastructure.

OCC Actions Support On-Chain Banking Activity

One of the clearest signs of progress comes from the OCC. Bank of America noted that the agency has provisionally authorized five digital-asset companies to operate under national trust bank charters.

These approvals allow crypto custody and stablecoin-related services to operate inside the federally regulated banking system. However, the report emphasized that such services must be offered as fiduciary activities and supported by robust compliance, liquidity, and risk controls.

By opening this pathway, the OCC is signaling growing federal acceptance of on-chain banking models, the analysts said.

FDIC Stablecoin Rules Expected This Week

Meanwhile, attention is shifting to the FDIC, along with the OCC’s actions. Bank of America expects the agency to release a proposed rule as early as this week.

The proposal will outline the procedures by which stablecoins intended for payment, issued by FDIC-regulated bank subsidiaries, may secure regulatory approval in accordance with the standards set forth under the GENIUS Act.

Under the law, final rules must be completed by July 2026, with implementation scheduled for January 2027. This timeline reinforces the idea of a measured, multi-year transition rather than a sudden change.

Federal Reserve Coordinates Oversight Standards

At the same time, the Federal Reserve is aligning its approach with other regulators. Bank of America stated that Federal Reserve officials have indicated coordination on capital, liquidity, and risk-allocation standards among stablecoin issuers.

These measures are also mandated under the GENIUS Act. Together, the steps suggest regulators are working toward a unified framework that supports innovation while maintaining financial stability.

Global Developments Reinforce the Trend

The report noted that U.S. efforts are not happening in isolation. Bank of America linked domestic developments to a broader global push to regulate stablecoins.

As an example, the analysts cited a recent Bank of England proposal for systemically important sterling stablecoins. That framework includes asset-backing rules and exposure limits.

Tokenized Deposits Gain Attention

Beyond regulation, banks are also testing new market structures. Bank of America pointed to initiatives by Singapore-based DBS and JPMorgan as evidence of this shift.

Specifically, the two banks are working on a system that would enable seamless transfer of tokenized assets between public and private blockchains. In fact, this work builds on JPMorgan’s JPMD tokenized deposit initiative, the analysts said.

These projects have intensified debate over whether tokenized deposits could eventually serve as an alternative to stablecoins.

Looking ahead, Bank of America envisions a potential shift of bonds, stocks, money-market instruments, and international payments onto blockchain-enabled platforms.

To keep pace, banks will need to cultivate advanced expertise in blockchain technology and assess the opportunities presented by tokenized assets and on-chain settlement frameworks. The analysts said this evolution will unfold gradually, but its impact on the banking sector could be significant.