On March 17, the SEC and CFTC issued a joint interpretation establishing a five-category token taxonomy and naming 16 digital commodities. SEC Chair Atkins announced a safe harbor framework for token issuers. The Senate voted 89-10 to ban CBDCs through 2030. Federal regulators confirmed equal capital treatment for tokenized securities. The CLARITY Act's stablecoin yield stalemate broke on March 20, with draft compromise text now under industry review. The OCC finalized a charter rule effective April 1 clarifying trust bank authority. And eleven companies have filed for OCC trust bank charters in 83 days.
The SEC and CFTC Issued a Joint Token Taxonomy
On March 17, the SEC and CFTC issued a joint interpretation defining which crypto assets are securities, which are commodities, and which are neither. The result is a five-category classification: digital commodities, digital collectibles, digital tools, payment stablecoins (under the GENIUS Act), and digital securities (tokenized traditional assets). Only the last category falls under the securities laws.
Sixteen crypto assets were explicitly named as digital commodities, including Bitcoin, Ethereum, Solana, XRP, Cardano, Chainlink, Avalanche, Polkadot, Stellar, Litecoin, and others. These fall under CFTC spot market jurisdiction.
SEC Chair Paul Atkins called it the end of "more than a decade of uncertainty" and announced plans for "Reg Crypto," a safe harbor that would give token issuers a startup exemption of up to four years from full registration requirements. As of March 25, the framework remains conceptual — Atkins said the SEC anticipates releasing a formal proposal for public comment "in the coming weeks," but no draft text has been published. The CFTC issued a companion statement confirming it will administer the Commodity Exchange Act consistent with the interpretation.
For banks: Banks evaluating custody, trading, or lending products tied to digital assets now have a federal taxonomy to reference for compliance. The interpretation is not a final rule and could be subject to revision. The 16 named digital commodities are classified outside the securities laws, which may simplify compliance considerations for custody, trading, or transaction facilitation. The agencies described the framework as "technology-neutral," meaning blockchain-native assets and tokenized traditional assets are covered under the same classification structure.
Sources: SEC Press Release | SEC Chair Atkins Speech | CoinDesk
SEC and CFTC Signed a Joint Oversight MOU
Six days before the token taxonomy, the SEC and CFTC signed a Memorandum of Understanding on March 11 replacing their 2018 agreement. The new MOU creates a Joint Harmonization Initiative for coordinated crypto oversight, covering product definitions, clearing and margin frameworks, dual-registered exchanges, and enforcement coordination.
For context: a persistent jurisdictional question between the SEC and CFTC was that the two agencies disagreed on which assets fell under whose authority. Compliance departments cited this as a barrier to building programs, since the regulatory framework changed depending on which agency was involved.
For banks: The MOU establishes a coordination framework intended to align digital asset oversight between the two agencies. It specifically addresses dual-registered exchanges and joint clearing standards — infrastructure relevant to banks integrating digital asset services.
Sources: Cadwalader | PYMNTS
The Senate Voted to Ban CBDCs (89-10)
On March 12, the U.S. Senate voted 89-10 to pass the 21st Century ROAD to Housing Act, which includes a provision banning the Federal Reserve from issuing a central bank digital currency until 2030. The bill previously passed the House but was substantially amended by the Senate.
The CBDC ban drew broad bipartisan support. Senator Elizabeth Warren blocked efforts to make it permanent, negotiating the 2030 sunset. The White House has formally backed the bill in its current form. However, the House has not yet scheduled a vote on the Senate's amended version. Some conservative House Republicans have objected to the temporary nature of the ban, pressing for a permanent prohibition.
For banks: A retail CBDC would create a direct Federal Reserve liability competing with bank deposits and payment services. With the ban in place through 2030, bank-issued stablecoins, tokenized deposits, and private-sector payment infrastructure operate in an environment without retail CBDC competition — though the ban has a sunset and the bill still requires House concurrence and presidential signature.
Sources: CoinDesk | Washington Examiner
Tokenized Securities Receive Equal Capital Treatment
On March 5, the Federal Reserve, FDIC, and OCC jointly issued interagency guidance confirming that tokenized securities receive identical regulatory capital treatment to their non-tokenized counterparts. The agencies stated that their capital rules are "fundamentally technology neutral" — the blockchain used to issue or record an asset does not change its risk weight.
The guidance applies regardless of whether the asset sits on a permissioned or permissionless chain. A tokenized Treasury receives the same treatment as a book-entry Treasury. An eligible tokenized security that meets the definition of "financial collateral" qualifies as a credit risk mitigant under the capital rule. The guidance states that banks must conduct due diligence on legal enforceability of ownership rights and evaluate operational risks of the DLT platforms involved.
For banks: This addresses capital-treatment questions around tokenized assets. Combined with the OCC's interpretive letters on custody (IL 1170) and riskless principal transactions (IL 1188), there is now federal guidance addressing custody, trading, and capital treatment for blockchain-based securities. Open questions remain around operational risk standards for specific DLT platforms.
The CLARITY Act Stablecoin Yield Stalemate Breaks
The Digital Asset Market Clarity Act — the most comprehensive crypto market structure bill to pass the House (294-134) — had stalled in the Senate over whether stablecoin issuers can offer yield on dollar-denominated tokens. On March 20, Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) announced they had reached an agreement in principle, backed by the White House.
The draft text was released for industry review on March 23. Its central provision: passive stablecoin yield — earned simply for holding a dollar-pegged token — is banned. Digital asset service providers, including exchanges, brokers, and affiliated entities, are prohibited from offering yield directly, indirectly, or through any arrangement that is economically or functionally equivalent to bank interest. Activity-based rewards tied to payments, transfers, or platform use remain permitted. The SEC, CFTC, and Treasury have twelve months from enactment to define what qualifies as activity-based rewards.
Initial industry reaction was mixed. CoinDesk reported the language was viewed as "overly narrow and unclear" by some crypto insiders. Following the text's release, Circle's stock price fell approximately 20% and Coinbase shares declined 8%. The American Bankers Association, which had formally rejected the earlier White House compromise on March 5, has not issued a public response to the new text.
For banks: The compromise text addresses the deposit-competition concern at the center of the ABA's opposition. Community banks fund 60% of small-business loans and 80% of agricultural lending from deposits (ABA data). If passive stablecoin yield were permitted, a portion of those deposits could shift to non-bank issuers. The current draft bans that structure. However, the definition of "activity-based rewards" remains pending, and the bill still faces five sequential hurdles: Senate Banking Committee markup (targeted for second half of April), full Senate floor vote requiring 60 votes, reconciliation with the Agriculture Committee version, reconciliation with the House-passed version, and presidential signature.
Sources: CoinDesk (yield text) | CoinDesk (compromise) | FinTech Weekly
OCC Trust Bank Charters: Eleven Filings and a New Rule
Since December, eleven companies have filed for or received conditional national trust bank charters from the OCC in 83 days. The latest: Zerohash filed on March 4. Morgan Stanley filed in February for a subsidiary called Morgan Stanley Digital Trust National Association. Payoneer followed. The Conference of State Banking Supervisors has pushed back, calling the resulting structure a "Franken-charter."
On March 2, the OCC finalized amendments to its chartering rule at 12 CFR 5.20, replacing the term "fiduciary activities" with "operations of a trust company and activities related thereto." The rule takes effect April 1, 2026. The OCC stated the amendment does not expand or contract its chartering authority, but removes a textual ambiguity that could have been read to limit national trust banks to fiduciary activities only. The practical effect: the rule confirms that trust banks can engage in non-fiduciary activities such as custody and safekeeping.
For banks: Morgan Stanley's filing is structured around its existing wealth management business — ETFs for market access, E*TRADE for retail, and a trust bank for custody and staking. This appears consistent with a broader trend: large financial institutions are building digital asset infrastructure through trust bank subsidiaries rather than integrating it into existing charters. The April 1 charter rule clarification may reduce legal uncertainty for institutions evaluating this structure.
Sources: OCC Charter Rule | FinTech Weekly | Banking Dive
What to Watch
CLARITY Act markup. The Senate Banking Committee markup is targeted for the second half of April, after Easter recess ends April 13. The stablecoin yield compromise text is under review. Five procedural hurdles remain before the bill can become law.
Reg Crypto proposal. SEC Chair Atkins said the formal proposal will come "in the coming weeks." No draft text has been published. The scope of the startup exemption — up to four years — has not been defined.
GENIUS Act comment deadline. The OCC's proposed rule implementing the GENIUS Act for payment stablecoin issuers has a comment period closing May 1, 2026. The proposal poses 211 questions to the public.
OCC charter rule effective date. The amended chartering rule confirming trust bank authority for non-fiduciary activities takes effect April 1, 2026.
CBDC bill in the House. The White House has backed the Senate-passed version. The House has not scheduled a vote. Conservative Republicans are pushing for a permanent CBDC ban rather than the 2030 sunset.
Track regulatory developments as they happen. Our Regulatory Radar monitors OCC interpretive letters, FDIC guidance, Fed actions, and state-level developments. View the Regulatory Radar at galoy.io/research/regulatory
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