Bank of America predicts that banks’ transition to blockchain will take years

In a research report released by the company on Monday, it was pointed out that regulatory discussions regarding cryptocurrencies are gradually giving way to concrete implementation, laying the foundation for banks to move more business on-chain in the coming years.

This shift, Bank of America claims, is directly influenced by U.S. banking regulators, who have begun to define how stablecoins and tokenized deposits will operate within the traditional financial system.

Regulation Moves from Planning to Execution

Bank of America analysts led by Ebrahim Poonawala believe that regulatory momentum is now very apparent.

For example, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve are jointly formulating standards for digital asset activities.

The report notes that recent actions do not signal broad policy intentions, but rather demonstrate pragmatic rulemaking. This marks the beginning of a multi-year transformation expected to migrate payments and real-world assets to blockchain infrastructure.

OCC Actions Support On-Chain Banking Activities

One of the clearest signs of progress comes from the Office of the Comptroller of the Currency (OCC). Bank of America points out that the agency has preliminarily authorized five digital asset companies to operate as national trust banks.

These approvals allow cryptocurrency custody and stablecoin-related services to operate within the federally regulated banking system. However, the report emphasizes that such services must be provided as fiduciary activities and be accompanied by robust compliance, liquidity, and risk control measures.

Analysts state that by opening this pathway, the OCC demonstrates the federal government's growing acceptance of on-chain banking models.

FDIC Stablecoin Rules Expected to Be Announced This Week

Meanwhile, attention is turning to the actions of the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC). Bank of America expects that the agency may release a proposed rule as early as this week.

The proposal will outline how stablecoins issued by bank subsidiaries regulated by the FDIC for payment purposes can obtain regulatory approval according to relevant standards under the Genius Act.

According to the law, the final rule must be completed by July 2026, with implementation planned for January 2027. This timeline underscores a steady, multi-year transition rather than a sudden change.

Federal Reserve Coordinates Regulatory Standards

At the same time,the Federal Reserve is coordinating its approach with other regulatory agencies. Bank of America states that Federal Reserve officials have indicated they will coordinate standards for capital, liquidity, and risk allocation for stablecoin issuers.

These measures are also mandated by the Genius Act.Together, these initiatives indicate that regulators are working to establish a unified framework to support innovation while maintaining financial stability.

Global Developments Reinforce This Trend

The report notes that U.S. efforts are not taking place in isolation. Bank of America links domestic progress to broader global regulatory actions on stablecoins.

For example, analysts cite the recent proposal by the Bank of England regarding systemically important pound sterling stablecoins. The framework includes asset backing rules and exposure limits.

Tokenized Deposits Attract Attention

Beyond regulation, banks are also experimenting with new market structures. Bank of America specifically mentioned initiatives by Singapore-based DBS and JPMorgan as evidence of this shift.

Specifically, these two banks are collaborating to develop a system that enables seamless transfers of tokenized assets between public and private blockchains. In fact, this work builds upon JPMorgan's JPMD, which analysts describe as a tokenized deposit program.

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

Looking ahead, Bank of America envisions that bonds, stocks, money market instruments, and international payments may migrate to blockchain platforms.

To keep pace, banks need to develop advanced expertise in blockchain technology and assess the opportunities brought by tokenized assets and on-chain settlement frameworks.Analysts state that this evolution will unfold gradually, but its impact on the banking industry could be significant.