Although the explanation letter No. 1188 on December 9th didn't generate much buzz, it could change the entire industry’s game rules—U.S. regulators have for the first time explicitly allowed nationwide banks to enter the crypto market as risk-free market makers. What does this mean? It means that the trillion-dollar traditional financial funds now have a compliant entry channel.

Let's first look at the new business model for banks. Customer A wants to sell BTC or ETH, and the bank instantly accepts the order; then Customer B’s buy order comes in, and the bank completes matching and settlement within two seconds. Throughout the process, the bank does not hold any crypto assets, does not bet on price fluctuations, and profits solely from spreads and fees. More importantly, these crypto assets are not on the bank’s balance sheet at all, implying zero risk exposure. In other words, banks have obtained a "get-out-of-jail-free card"—they can share in crypto market commissions without bearing market volatility risks.

This policy shift involves deep changes across three dimensions.

First is a qualitative change in liquidity. Currently, crypto market making mainly relies on exchanges and professional market makers, with liquidity resembling a stream—large trades can easily cause slippage. Once the bank’s market-making algorithms and trillion-level funds are integrated, market depth will sharply increase, and slippage will be reduced from 1-2% to below 0.1%. This is not just an upgrade in experience; for institutional investors, the reduction in costs could be decisive—where previously executing large allocations involved suffering significant slippage losses, now they can execute directly at market prices.

Second is a shift in institutional mindset. Previously, institutional crypto allocations were cautious "tentative investments" in the gray area; now, they have become a legitimate "licensed and compliant deployment." This is not just psychological reassurance but a comprehensive upgrade in risk control systems, financial statements, and audit procedures. More and more pension funds and insurance companies will thus eliminate compliance concerns about entering the market.

Finally, there is a redefinition of regulatory logic. Previously, regulation was about suppression; now, it is about orderly inclusion. The entry of banks means that the traditional financial frameworks of real-name systems, anti-money laundering, and risk disclosure are beginning to be applied to the crypto market. Market participants will become more numerous and more regulated, but this also marks the end of the era of unrestrained growth.