Davis Polk partner and Financial Institutions co-head David Portilla discussed the Senate’s crypto market structure bill with American Banker.

The article notes that the proposed bill’s permissibility provisions would expand the definition of which activities banks are allowed to participate in to explicitly include digital assets. The proposed permanent changes to bank permissibility are a response the Biden administration’s previous efforts to exclude high-risk digital assets from the traditional banking sector. 

 “What we learned between the change of administrations from Trump one to Biden and then Biden to Trump two is that the regulatory actions are not always durable, and so having the statutory authorization would provide that durability,” David explained. “In addition, I do think there’s value in Congress providing clear direction about what is permissible for banks and bank holding companies, without having to rely on the regulators to do that on their own.” 

Rather than bringing risk into the banking system, David said that the change benefits banks, crypto firms and financial stability alike. 

“Lending can present a threat to financial stability if it’s done in an unsafe and unsound way at scale. I think that’s true for anything,” he said. “Bringing an activity within the banking perimeter is a good thing when that activity is essentially a financial intermediation activity, which is what banks, bank holding companies provide. And then it would be subject to supervision by federal banking agencies, which I think are pretty stringent supervisors.”

“Permissibility is the real prize for banks in crypto bill,” American Banker (February 24, 2026) (subscription required)

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