OCC Allows Banks To Handle Customer Crypto Assets

The Office of the Comptroller of the Currency (OCC) has confirmed that banks under its jurisdiction can handle customer crypto assets held in custody. This includes the ability to buy and sell these assets at the direction of customers, as well as the option to outsource certain crypto activities to third parties. Acting comptroller Rodney Hood, in a May 7 letter, stated that banks and federal savings associations can engage in these activities, provided they comply with applicable laws.

Hood further elaborated in a May 7 video that banks can offer additional custody services, such as record-keeping, tax, or reporting services for their customers. The OCC's press release also highlighted that financial institutions can outsource permissible crypto activities, including custody and execution services, to third parties while adhering to legal requirements.

This development is part of a broader shift in the OCC's approach to crypto, which has been evolving since March 7. Previously, the OCC had eased its stance on how banks can engage with crypto by allowing crypto-asset custody, some stablecoin activities, and participation in independent node verification networks.

Hood emphasized the significance of this digital transformation, noting that over 50 million Americans hold some form of cryptocurrency. The OCC, as an independent bureau within the US Department of the Treasury, regulates and supervises all national banks and federal branches of foreign banks.

Industry experts have welcomed the OCC's clarification. Katherine Kirkpatrick Bos, general counsel at a ZK-rollup developer, described the letters as signaling a shift in the OCC’s approach, favoring the integration of crypto within banking frameworks. She noted that further guidance will provide clarity and allow banks to re-enter the crypto space without the fear of regulatory risk.

Faryar Shirzad, chief policy officer at a crypto exchange, also praised the move, highlighting the OCC's commitment to regulatory clarity and adherence to supervisory best practices. This shift in regulatory stance is part of a broader trend in the US, where the administration has taken a more favorable attitude toward crypto since coming into power.

In April, the US Federal Reserve withdrew guidance that deterred banks from engaging in crypto and stablecoin activities. Additionally, US President Donald Trump signed a joint congressional resolution overturning a previous rule that required decentralized finance protocols to report transactions to the Internal Revenue Service.

This regulatory clarity is expected to drive further innovation in the financial services industry. By allowing banks to manage crypto assets on behalf of their customers, the OCC is paving the way for greater adoption and integration of digital assets into the traditional financial system. This move is likely to enhance the security and accessibility of crypto assets, while also fostering innovation in the financial sector.