OCC Expands Crypto Banking Options, Accelerating TradFi Integration

The Office of the Comptroller of the Currency (OCC) has recently made significant strides in redefining and expanding crypto banking options, marking a pivotal moment in the intersection of the tokenized asset space and the traditional financial sector. This shift has been driven by several notable events, including the formation of a strategic bitcoin reserve, plans to amend tax treatment for cryptoassets, and a comprehensive overhaul of crypto policy at the Securities and Exchange Commission (SEC). Despite these developments, the OCC remains a powerful banking regulator in the United States, serving as the gatekeeper for which institutions can engage in certain activities within the banking sector.

In March 2025, the Acting Comptroller of the Currency issued a new publication, Interpretative Letter 1183, which provided much-needed clarity and specificity for traditional financial institutions (TradFi) to engage in crypto activities. This letter builds upon a 2020 publication, Interpretative Letter 1170, which addressed the authority and manner in which banks can offer crypto-adjacent services to customers. The 2020 publication emphasized that banks seeking to offer services to crypto clients and investors must apply the same risk management practices to crypto as they do to traditional assets.

With the new statement from the OCC, the integration of TradFi and crypto is set to accelerate. However, there are several key points that crypto investors should keep in mind. One clear implication of this policy shift is that the crypto sector is becoming too big to ignore. With a market capitalization in the trillions of dollars, TradFi institutions are developing products and services for both retail and institutional customers. Governments at various levels are also showing interest in directly purchasing bitcoin and other digital assets, indicating a growing demand for increased exposure to cryptoassets. TradFi institutions stand to benefit not only from the opportunities for fees and other bottom-line items but also from the chance to expand their offerings to younger generations, such as Millennials and Gen-Z/Gen Alpha customers.

In addition to the OCC's actions, the Federal Deposit Insurance Corporation (FDIC) has also been making significant policy changes. In September 2024, the FDIC issued a Notice of Proposed Rulemaking designed to reinforce and clarify the recordkeeping requirements for bank deposits held by nonbank companies. This rule, aimed at FDIC-insured depository institutions, will also significantly impact nonbank firms that rely on custodial accounts to offer crypto-adjacent payment services. The proposal includes specific requirements for recordkeeping, electronic file formats, daily reconciliations, documented policies, and an annual certification of compliance. These measures aim to ensure that controls, policies, and compliance testing are robust for all parties involved in services that touch either nonbank fintech operators or the digital asset ecosystem.

Despite the increase in interest and investment in the digital asset space since 2024, crypto payments continue to lag behind wider investment flows. Factors such as hacks, lingering doubts about the safety and security of cryptoassets, and price volatility have contributed to the sluggish overall adoption of crypto for payments. However, actions taken by the OCC and FDIC, along with wider policy changes, are creating a more hospitable environment for crypto payments. As the U.S. banking system becomes increasingly amenable to using blockchain for internal purposes and developing consumer products and services, crypto-based payments are expected to become more transparent, understandable, and safer. Combined with the high rates of ownership and interest in crypto by younger age cohorts, the future of crypto payments looks promising.