U.S. regulators need to provide more clarity on the rules of the road for cryptocurrencies and other digital assets amid ongoing confusion over what activities are allowed, a top banking executive said on Tuesday.

"We're hoping for more clarity around digital assets," Emily Portney, chief financial officer for Bank of New (BNY) York Mellon Corp, the country's 10th largest lender, told Reuters in an interview.

"Frankly, it's a bit confusing about who actually regulates digital assets and especially crypto … and of course exactly what you can or cannot do," said Portney, speaking after the bank posted a 17% rise in fourth quarter profits.

Portney's comments highlight growing frustration among banking industry executives as U.S. President Joe Biden's regulators have taken a cautious  approach to digital assets. With cryptocurrencies surpassing $3 trillion in November, banks are keen to enter the space but many feel they cannot launch new products or expand existing offerings until the rules are clearer.

BNY Mellon, which specializes in holding and servicing assets on behalf of clients, in February announced it was developing a custody and administration platform for digital assets.

The Office of the Comptroller of the Currency (OCC) said in November that banks must obtain written permission from their bank supervisors before engaging in cryptocurrency-related activities, including custody services, a reversal from the Trump administration's policy which gave banks permission to provide crypto custody services.

The OCC and other regulators are engaged in a “policy sprint” to understand where to offer regulatory clarity for banks on cryptocurrencies. That effort will likely inform new guidance or rules, which could be released as soon as this year.

"A lot of the activity is happening in I guess what I would call the shadow banking system just because of the lack of clarity," said Portney.