OCC Authorizes Banks to Buy, Sell, and Custody Crypto in Major Regulatory Shift
OCC Lifts Restrictions: Banks Cleared to Handle Crypto
In a significant regulatory shift, the Office of the Comptroller of the Currency (OCC) has approved U.S. banks under its supervision to buy, sell, and provide custody of cryptocurrencies. The decision is a reversal of the agency’s previous conservative approach to digital assets.
Rodney Hood, Acting Comptroller of the Currency, announced the change, stating that crypto is no longer a passing trend but a transformation of financial infrastructure. “We’ve confirmed that national banks and federal saving associations may engage in certain cryptocurrency activities responsibly, in order to serve their customers,” said Hood.
Banks Can Now Actively Offer Crypto Services
Banks are permitted to buy and sell cryptocurrencies in custody at the behest of the customer under the new guidance. They are also free to outsource both execution and custody services to third parties, provided those services comply with OCC risk management standards.
The following other crypto services are also permitted:
- Record keeping
- Tax reporting
- Valuation and settlement
- Facilitating fiat-to-crypto exchange
Banks may act as fiduciaries and sub-custodians, as long as they adhere to sound third-party risk management standards, the OCC said in its May 7 report.
Regulatory Harmony Among U.S. Agencies
The OCC’s move is part of a broader regulatory re-alignment. In April, the Federal Reserve withdrew regulations requiring state banks to notify regulators before engaging in crypto-related activities. It also rescinded guidelines that had restricted the use of stablecoins.
Similarly, the Federal Deposit Insurance Corporation (FDIC) and the OCC backed away from 2023 joint statements that had limited crypto transactions. The Securities and Exchange Commission (SEC) also removed this January a rule that had counted bank-held crypto as a liability.
The actions are amid heightened interest from crypto firms in acquiring bank charters to reduce borrowing costs and enhance operational legitimacy.
A Turning Point for Crypto-Banking Integration
This series of actions amounts to a remarkable shift in how the crypto sector is viewed by U.S. financial regulators. The OCC’s new guidance gives regulated banks the comfort and legal certainty to get more engaged in the digital asset economy.
While the industry is still under regulatory oversight, banks now have the green light to enter the crypto space responsibly, which marks a very important milestone in crypto’s acceptance within mainstream finance.
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OCC Authorizes Banks to Buy, Sell, and Custody Crypto in Major Regulatory Shift
OCC Lifts Restrictions: Banks Cleared to Handle Crypto
In a significant regulatory shift, the Office of the Comptroller of the Currency (OCC) has approved U.S. banks under its supervision to buy, sell, and provide custody of cryptocurrencies. The decision is a reversal of the agency’s previous conservative approach to digital assets.
Rodney Hood, Acting Comptroller of the Currency, announced the change, stating that crypto is no longer a passing trend but a transformation of financial infrastructure. “We’ve confirmed that national banks and federal saving associations may engage in certain cryptocurrency activities responsibly, in order to serve their customers,” said Hood.
Banks Can Now Actively Offer Crypto Services
Banks are permitted to buy and sell cryptocurrencies in custody at the behest of the customer under the new guidance. They are also free to outsource both execution and custody services to third parties, provided those services comply with OCC risk management standards.
The following other crypto services are also permitted:
- Record keeping
- Tax reporting
- Valuation and settlement
- Facilitating fiat-to-crypto exchange
Banks may act as fiduciaries and sub-custodians, as long as they adhere to sound third-party risk management standards, the OCC said in its May 7 report.
Regulatory Harmony Among U.S. Agencies
The OCC’s move is part of a broader regulatory re-alignment. In April, the Federal Reserve withdrew regulations requiring state banks to notify regulators before engaging in crypto-related activities. It also rescinded guidelines that had restricted the use of stablecoins.
Similarly, the Federal Deposit Insurance Corporation (FDIC) and the OCC backed away from 2023 joint statements that had limited crypto transactions. The Securities and Exchange Commission (SEC) also removed this January a rule that had counted bank-held crypto as a liability.
The actions are amid heightened interest from crypto firms in acquiring bank charters to reduce borrowing costs and enhance operational legitimacy.
A Turning Point for Crypto-Banking Integration
This series of actions amounts to a remarkable shift in how the crypto sector is viewed by U.S. financial regulators. The OCC’s new guidance gives regulated banks the comfort and legal certainty to get more engaged in the digital asset economy.
While the industry is still under regulatory oversight, banks now have the green light to enter the crypto space responsibly, which marks a very important milestone in crypto’s acceptance within mainstream finance.
Read More
SKALE Labs Reveals New Protocol to Combat $1.8 Billion MEV Problem