Customers Bank tightens grip on crypto risk after Fed action
Customers Bank has spent the past year reinventing its digital asset strategy, following a high-profile intervention from the Federal Reserve.
The Malvern, Pennsylvania-based lender was ordered in 2023 to seek Fed approval before pursuing any new partnerships or services tied to digital assets. The enforcement action forced the bank to confront weaknesses in its oversight framework and rebuild its approach to risk management.
Chief executive Sam Sidhu says the process has left the institution stronger. “Our regulators’ bar was higher than our bar last year. Our bar is higher than our regulators’ bar this year,” he said, highlighting changes to governance and operational processes.
The revamp has included hiring dozens of staff, investing in infrastructure, and embedding safeguards that Sidhu argues would take competitors years to replicate. “What we’ve built creates a multiyear moat,” he said.
Customers now offers a range of banking services for digital-asset companies while operating cubiX, its instant payments system that uses distributed ledger technology to process tokenized transactions.
Activity on cubiX is accelerating: July was its busiest month so far, with deposits climbing 20%. The bank processed $1.5 trillion in transaction volume related to digital assets in 2024 and is on pace to near $2 trillion this year, according to Sidhu.
The regulatory environment is also shifting. Calls from the Trump administration for clear national rules on cryptocurrencies, and renewed congressional focus on stablecoins, have intensified pressure on banks to build resilient systems.
Sidhu believes Customers is well-placed to benefit from the eventual emergence of a clearer framework.
The institution’s evolution coincides with leadership changes at the parent company. In July, Customers announced that Sidhu will take over as CEO of Customers Bancorp on Jan. 1, 2026, when his father, Jay Sidhu, retires from that role and becomes executive chair.
The elder Sidhu has led the group since 2009, when he acquired distressed New Century Bank and transformed it into a $22 billion-asset institution.
Sam Sidhu, who became CEO of Customers Bank in 2021, has been a board member for more than a decade and previously served as chief operating officer. He will continue as president of both the bank and the holding company once he assumes the CEO role at Customers Bancorp.
For Sidhu, the bank’s overhaul is about more than satisfying regulators. He describes compliance as a competitive differentiator, one that will allow Customers to expand its wallet share while fending off rivals. The digital-asset strategy, he insists, is no longer experimental but integral to the bank’s future.
“The work we’ve done has raised our bar above the regulators,” he said. “That’s what positions us to lead in this space.”