crypto ETNS vs ETFs. Photo by BeInCrypto The US banking industry has mounted a coordinated challenge to the Office of the Comptroller of the Currency’s (OCC) approach. The pushback targets the regulator’s efforts to integrate cryptocurrency firms into the federal banking system. On December 12, OCC issued conditional approval of national trust charters for five digital asset firms, including Ripple, Fidelity, Paxos, First National Digital Currency Bank, and BitGo. The bank regulator stressed that the cryp ...

Core Viewpoint - US banking agencies are easing regulations from the Obama era that were deemed overly restrictive, particularly affecting the private credit industry [1][2]. Regulatory Changes - The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) criticized the 2013 guidance as "overly restrictive" and "overly broad," leading to a significant market share decline for regulated banks in leveraged lending [2][5]. - The original guidance was intended to combat weakening lending standards as private debt issuance increased, but it inadvertently pushed business to nonbank lenders [5][7]. Industry Impact - The easing of regulations is expected to allow banks to engage in riskier lending activities, which could help meet the credit needs of businesses [6]. - Despite the relaxed rules, banks will still face some restrictions, ensuring that the lending environment does not become excessively lenient [6]. Market Dynamics - The previous stringent regulations led to "regulatory arbitrage," where lending shifted to lightly regulated private lenders, moving outside federal oversight [7].

Investment Strategy & Regulatory Arbitrage - Vanguard, with $7.9 trillion AUM, refuses direct Bitcoin ETFs for clients but became the 2nd largest BTC treasury shareholder [1] - The strategy involves blocking direct exposure for compliance cover while accumulating massive indirect positions through equity stakes [1] - This accumulation occurs through equity proxies in companies like Microstrategy, Coinbase, and Marathon, providing plausible deniability [1] - Major funds are expected to copy this playbook: publicly deny crypto, accumulate treasury stocks quietly, and maintain regulatory blessing [1] Market Impact & Future Trends - Institutional money doesn't need ETFs when equity gives them 2-5x leveraged exposure [1] - The next wave hits when Fidelity and BlackRock clients discover this loophole [1] - Vanguard has shown the blueprint for $50 trillion to enter crypto [1]