The Office of the Comptroller of the Currency (OCC) confirmed on May 7 that federally chartered banks and savings associations are now allowed to offer crypto services, such as custody and execution, including through third-party providers.
This is elaborated in the Interpretive Letter 1184 and extends prior guidance to make it clear that banks can engage in the business of digital assets as long as they meet certain risk management and legal requirements.
The OCC also explained that institutions can engage in buying and selling of assets on behalf of customers and outsourcing other crypto-related services such as custody and trading.
However, these activities must be governed in the same way as financial services, such as due diligence, cybersecurity, and third-party risk management. This comes after a significant policy change in March that allowed banks not to require prior approval for some crypto activities.
It was a departure from the previous Biden administration policy which demanded that banks must inform regulators before extending their services to the crypto industry. The OCC now permits banks to provide services such as crypto-asset custody, stablecoins, and even acting as nodes on a blockchain.
With this update, the OCC is not only giving more defined direction but also expressing a more receptive attitude towards digital assets in the banking industry. The ruling re-establishes that crypto services can coexist with the U.S. banking system, provided they abide by federal laws.
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