Blockchain banking: from concept to regulated infrastructure

For the past few years, “waiting for regulatory clarity” was the honest answer in many serious conversations about blockchain infrastructure in banking. That answer is starting to change.

Two developments in 2025 and 2026 are worth understanding together: a federal regulatory framework for payment stablecoins and a joint clarification from the three main US banking regulators on how tokenized securities are treated under capital rules. Neither event resolves every open question. Together, they represent a meaningful shift in how regulated institutions can approach blockchain-based settlement.

What the regulatory guidance actually says

The legal foundation arrived first. The GENIUS Act established the first federal framework for payment stablecoins, defining what qualifies under federal law and establishing which agencies supervise issuers.

On March 5, 2026, the Federal Reserve, OCC, and FDIC issued joint guidance on a question that had been hanging over institutional conversations about digital assets: if a bank holds an eligible tokenized security, does that change how much capital the bank must hold against it?

The agencies clarified: not generally. “The technologies used to issue and transact in a security do not generally impact its regulatory capital treatment.” Blockchain is the delivery mechanism. It changes how ownership and settlement move. It does not automatically change what the asset is.

This is a meaningful clarification for institutions that had been uncertain about the capital implications of engaging with tokenized instruments. Requiring banks to hold more capital against blockchain-based instruments than equivalent traditional ones would have been the functional equivalent of a regulatory tax on the technology. The March 5 guidance removes that ambiguity.

What tokenization is, and why it matters here

Tokenization is the process of recording ownership of a traditional financial asset on a blockchain rather than in a conventional ledger or clearing system. Here’s what that means in practice.

The old way. Imagine you walk into a market stall and buy an apple. The vendor writes your name in his ledger book. You own the apple. If you want to sell it to someone across town tomorrow, you both have to come back to the market during business hours, wait for the vendor to open his ledger, cross your name out, and write the buyer’s name in. Traditional securities settlement works similarly: multiple systems must update and reconcile their records, within business-hours windows, over one or more business days.

The new way. Now imagine the vendor issues a digital token representing your apple — a unique entry on a shared record that every participant can verify instantly. Sell it to someone in Tokyo tonight at midnight: you send the token, ownership transfers, and the record updates on every participant’s copy simultaneously. Tokenized settlement can move the ownership record on a shared ledger, making verification and settlement faster, more transparent, and potentially available outside normal business-hour windows.

A tokenized Treasury bond works on this principle. The bond is still the same instrument — same interest payments, same government backing. The token is not a new asset. It is a digital record of ownership of the same Treasury bond, held on a shared ledger rather than in a conventional clearing system.

A dollar-backed stablecoin applies a similar idea to money movement: a digital token intended to represent dollar value, designed to settle faster and more continuously than traditional payment rails.

The GENIUS Act governs stablecoin issuers. The March 5 guidance covers the eligible tokenized securities that run on the same infrastructure. The two frameworks together define the regulatory perimeter for institutional-grade blockchain banking.

The charter wave

The pace of institutional response to the GENIUS Act is worth noting.

Between December 2025 and early 2026, the OCC conditionally approved charter applications from Circle, Ripple, BitGo, Paxos, Fidelity Digital Assets, Bridge (Stripe’s stablecoin subsidiary), Protego, and Crypto.com, among others. More than a dozen applications arrived in roughly 90 days. The OCC had processed 14 de novo charter applications across all of 2025. The pace in early 2026 overtook that figure within weeks.

Bank-grade custody, compliance infrastructure, interoperability, and operational resilience all remain active areas of development. What the charter applications signal is that institutions with real transaction volumes are treating the regulatory framework as workable, not as a reason to wait indefinitely.

Erebor and Infinite Accounts

Of all the institutions that moved in this window, Erebor Bank, N.A. is worth understanding in detail, because it was built from scratch for this regulatory environment rather than adapted from an existing model.

Erebor received its final OCC national bank charter in February 2026, with FDIC deposit insurance approved in December 2025. It operates 24/7 with no branches. Founders Fund, Peter Thiel’s firm, is the primary backer. Palmer Luckey, who co-founded Anduril Industries, is the bank’s co-founder. Erebor raised $350 million at a $4.35 billion valuation and is required to maintain at least $276 million in paid-in capital with a 12% tier 1 leverage ratio for its first three years — capital requirements consistent with heightened regulatory scrutiny.

On April 22, 2026, Infinite launched dedicated bank accounts for embedded stablecoin and fiat payments, powered by Erebor Bank, N.A., Member FDIC. Infinite is the infrastructure layer connecting traditional bank accounts, payment rails, and stablecoin settlement through one API. Businesses that integrate it get a dedicated account with a unique routing number handling both traditional payment rails and stablecoin settlement, available at any hour, backed by federal deposit insurance.

Settlement speed has implications beyond operations. It can affect balance sheet efficiency, liquidity visibility, reconciliation, and product design, particularly where real-time, 24/7 settlement creates measurable value. Traditional settlement infrastructure has served the financial system well for decades. Blockchain-based settlement introduces capabilities that may complement and extend today’s systems in specific contexts.

What’s still unresolved

The remaining gaps are real. The IRS has not issued guidance on the tax treatment of tokenized assets, a meaningful consideration for institutions planning large-scale adoption. The OCC’s proposed rules on tokenized deposits face a finalization deadline of July 18, 2026. Both are live questions that deserve serious attention before finalizing implementation plans.

Regulated financial institutions are beginning to absorb blockchain settlement capabilities into banking infrastructure. The regulatory framework is catching up to enable that thoughtfully.

What comes next

Implementation will define the next phase more than announcements will. The questions that will matter are practical: whether institutions can build bank-grade custody and compliance around these instruments, whether interoperability standards emerge, and whether operational resilience holds in live environments.

What comes next extends beyond stablecoins. It is about whether regulated financial institutions can use new settlement rails to improve efficiency and resilience without compromising the trust that makes those institutions valuable in the first place.

- Shish

Opinions shared here are personal and do not reflect the views of my employer or any affiliated organization.