TD Cowen: Trump administration may relax rules for banks to provide crypto services, but banks should be cautious

Investment bank TD Cowen said the incoming Trump administration could bring positive changes to cryptocurrency entities that work with banks, but expectations for this new regulatory environment should be "modest." TD Cowen's Washington research team (led by Jaret Seiberg) wrote in a report on Monday that banks have a responsibility to comply with anti-money laundering (AML) and Bank Secrecy Act (BSA) rules, as well as manage risks such as liquidity and concentration. Therefore, "even if Trump's regulators express fewer concerns about the increase in connections between traditional finance and cryptocurrencies, this will cause some banks to remain cautious," Seiberg said, "which is why some banks may still think the risks are too great, while others will seize the opportunity. In addition, some cryptocurrency entities may resist any government oversight. This may limit banks' comfort level in working with them." Nevertheless, Seiberg said that the connection between traditional finance and cryptocurrencies will be "inevitable" under the Trump administration. He pointed out that banks will be more willing to accept cryptocurrency risks over time. (The Block)