OCC Reaffirms Permissible Cryptocurrency Activities for Banks, Removes Prior Approval Requirements

OCC Reaffirms Permissible Cryptocurrency Activities for Banks

  • OCC’s Interpretive Letter 1183 confirms that national banks can legally engage in crypto custody, certain stablecoin activities, and blockchain network participation.
  • Banks no longer need to obtain supervisory non-objection before engaging in permitted crypto activities, reducing regulatory burden.
  • The American Bankers Association has expressed strong support for the OCC’s decision, calling it an “important step” for enabling banks’ success in the digital asset ecosystem.

The Office of the Comptroller of the Currency (OCC) has officially reaffirmed which cryptocurrency activities are permissible within the federal banking system. The regulatory clarification comes through Interpretive Letter 1183, which maintains that national banks and federal savings associations can legally provide crypto-asset custody services, engage in specific stablecoin activities, and participate in independent node verification networks.

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The OCC’s updated guidance notably eliminates a previously required regulatory hurdle for banks interested in cryptocurrency services. Financial institutions no longer need to secure supervisory non-objection or demonstrate adequate control systems before engaging in these permitted crypto activities.

Acting Comptroller of the Currency Rodney E. Hood emphasized the OCC’s expectations for risk management: “The OCC expects banks to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones. Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”

As part of this regulatory realignment, the OCC has also withdrawn from previous joint statements that highlighted risks crypto-assets pose to banking organizations and the liquidity challenges present in crypto-asset markets.

The banking industry has responded favorably to the OCC’s position. Rob Nichols, president and CEO of the American Bankers Association, stated: “We applaud the OCC’s release of Interpretive Letter 1183 confirming the permissibility of national banks to provide key products and services in the digital asset market and removing the requirement for national banks to obtain supervisory non-objection before engaging in these activities. ABA has strongly advocated that these misguided policies, which created an atypical standard for many product and technology implementations, be rescinded. Banks have a critical role to play in the digital asset ecosystem, which has the potential to be a catalyst for change in traditional financial markets, and the OCC’s actions today are an important step toward enabling that success.”

This regulatory clarification comes at a time when traditional financial institutions are increasingly exploring ways to integrate digital asset services into their offerings. By removing bureaucratic barriers while maintaining risk management expectations, the OCC appears to be striking a balance between enabling innovation and ensuring safety in the banking system.

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