Bank of America Predicts Multi-Year Shift to On-Chain Banking Amid Regulatory Clarity
Bank of America (BofA) Global Research has released a new report predicting that the U.S. banking industry is entering a multi-year, structural transformation that will view core financial activities migrate to blockchain technology, establishing a future dominated by on-chain banking. This bullish forecast is driven not just by technological potential, but by a major inflection point in U.S. cryptocurrency and stablecoin regulation.
Regulatory Catalyst for Adoption
The BofA report highlights that the shift in regulatory sentiment is the critical accelerator, moving the banking sector from deliberation to implementation.
The recent conditional approval of national trust bank licenses by the Office of the Comptroller of the Currency (OCC) for five digital asset companies, including major players like Ripple and Circle, is cited as a key turning point. BofA considers this a crucial step toward federal acceptance of stablecoins and crypto custody services, signaling that digital asset firms can operate within the regulated financial mainstream. The report also notes expected action from the Federal Deposit Insurance Corporation (FDIC), which is anticipated to release a regulatory proposal for payment stablecoins this week. This is in line with the GENIUS Act, which mandates finalized rules by July 2026, with implementation set for January 2027. Federal Reserve officials are also collaborating with banking regulators to establish capital, liquidity, and diversification standards specifically for stablecoin issuers, further integrating these digital assets into the regulatory perimeter.
The Migration of Real-World Assets On-Chain
The report predicts that traditional assets and transactions will increasingly migrate to blockchain platforms, requiring banks to rapidly evolve their infrastructure. Specifically, BofA anticipates that bonds, stocks, money market funds, and cross-border payments will be among the first major segments to transition on-chain. This shift is already being explored by major financial institutions like JPMorgan Chase, which is working on its JPM Coin and tokenized deposit initiatives, and Singapore’s DBS Bank, both of which are exploring interoperable frameworks for tokenized value transfer across public and permissioned blockchains. To prepare for this inevitable shift, the report states that banks must not only become familiar with blockchain technology but also show a readiness to experiment with tokenized assets and on-chain settlement mechanisms. Tokenized deposits, issued by licensed institutions and subject to banking regulations, are viewn as a vital intermediate step, offering enhanced efficiency and 24/7 services.
