- OCC rescinds requirement for banks to obtain pre-approval for cryptocurrency activities
- Change reverses 2021 restrictions and restores banks’ ability to engage in crypto custody, stablecoin reserves, and blockchain validation
- Former Acting Comptroller credits strict oversight for protecting banks during 2022’s crypto market turmoil
The U.S. Office of the Comptroller of the Currency (OCC) has eliminated the requirement for banks to obtain prior regulatory approval for cryptocurrency-related activities, marking a significant shift in digital asset regulation under Acting Comptroller Rodney Hood’s leadership.
The latest regulatory adjustment, detailed in Interpretive Letter 1183, reverses restrictions implemented in 2021 through Letter 1179. This change restores banks’ ability to engage in three key cryptocurrency activities without seeking advance permission: providing crypto custody services, holding stablecoin reserves, and operating blockchain nodes for stablecoin transaction validation.
The regulatory pendulum swing reflects the evolving approach to crypto regulation across different administrations. Under the Trump administration, then-Acting Comptroller Brian Brooks established the initial framework permitting these activities. The Biden administration subsequently imposed additional oversight through Letter 1179, requiring banks to obtain non-objection letters before engaging in crypto operations.
The OCC’s latest decision cites supervisory experience as the basis for removing the pre-approval requirement. In its announcement, the agency stated: "This rescission is intended to reduce burden, encourage responsible innovation, and enhance transparency."
Michael Hsu, the previous Acting Comptroller who implemented the now-rescinded restrictions, recently defended the stricter approach. During an Intrafi podcast, he noted: "We just made sure to tell banks, look, you can do crypto, but it’s got to be safe, sound and fair, and you have to demonstrate it to us." He credits this cautious stance for limiting the banking sector’s exposure to 2022’s cryptocurrency market volatility.
The leadership transition continues at the OCC, with Acting Comptroller Hood serving temporarily while Jonathan Gould, Trump’s nominee, awaits Senate confirmation. Gould’s background includes working alongside former Acting Comptroller Brian Brooks at both the OCC and crypto firm Bitfury before joining Jones Day as a partner.
Industry observers note that the OCC’s designation as the preferred regulator in recent stablecoin legislation suggests its oversight approach may be strategically positioned rather than intended to obstruct innovation in the cryptocurrency sector.
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