OCC clears banks for crypto custody and other businesses
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The OCC seal. Photo: Al Drago/Bloomberg/Getty
Banks supervised by the Office of the Comptroller of the Currency (OCC) will no longer need permission to engage in certain kinds of common cryptocurrency related activities, according to a new interpretative letter issued Friday.
Why it matters: This is a turnabout for the agency, which joined the Fed and the FDIC in January 2023, under the Biden administration, in issuing a general caution against banks partnering with digital asset businesses or offering related services.
What they're saying: "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," acting Comptroller of the Currency Rodney Hood said in a statement.
- The OCC's interpretative letter 1183 clarifies that banks under the OCC may conduct cryptocurrency custody activities, engage in stablecoin businesses and operate as validation nodes on distributed ledgers, for verifying customer payments.
The big picture: Stablecoins, which conduct global business in the trillions annually, have been one of the hot topics in D.C., both in Congress and at the White House.
- The announcement comes against the backdrop of President Trump's Digital Asset Summit, in which he gathered multiple cryptocurrency entrepreneurs to meet with members of his administration.
- Treasury secretary Scott Bessent specifically mentioned working with the OCC to rescind guidance that impeded the industry.
Zoom out: The FDIC, which has also been criticized for slowing down bank participation in the digital asset market, has not yet taken similar action, a spokesperson confirmed to Axios.
- As of Friday evening, the Fed had not issued any update on banking and crypto, though chair Jerome Powell told lawmakers during a congressional hearing last month that the central bank would take a fresh look at the guidance.
- In 2022, the FDIC and the Fed issued letters instructing the institutions they supervise to seek regulatory feedback before engaging in activities related to cryptocurrency.
- A fight has been underway in the courts to reveal the extent of the feedback, and whether it ultimately prevented institutions from engaging with the blockchain industry too much.
Editor's Note: This story has been updated with background on the Fed.
