US Banks Embrace Crypto Custody as Stocks Surge on OCC Guidance
1min read National banks and federal savings associations in the United States are now permitted to offer crypto custody and stablecoin services without prior regulatory approval. This significant development follows the issuance of new guidance by the Office of the Comptroller of the Currency (OCC). The latest directive, Interpretive Letter 1183, confirms that banks can engage in these activities under existing banking laws, eliminating the previous requirement to obtain supervisory non-objection before proceeding.
This marks a major shift in regulatory policy, streamlining the process for banks to integrate digital assets into their services. However, the OCC emphasized that while the approval requirement has been lifted, banks must maintain strong risk management controls akin to those required for traditional banking operations. Rodney E. Hood, the acting Comptroller of the Currency, stated that 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. He added that this decision reduces barriers for banks seeking crypto-related activities, marking a significant development after legal redress and pushback against unfair regulations from industry executives.
Key players in the crypto industry, including Circle CEO Jeremy Allaire, have enthusiastically welcomed the OCC’s announcement. Allaire expressed excitement about wiring up the existing financial system to the new Internet financial system, indicating that Circle mint is open for business. Similarly, crypto analyst Marty Party highlighted the decision’s economic impact, stating that the milestone would allow US banks to serve as validators on public networks, custody crypto for customers, and hold stablecoin. Popular crypto analyst Scott Melker also lauded the OCC’s reaffirmation that crypto activities are fully permissible in the US federal banking system.
Despite widespread excitement, some industry experts have urged caution. Custodia Bank founder and CEO Caitlin Long pointed out that while the OCC’s guidance is a positive step, broader regulatory obstacles remain. Long indicated that anti-crypto guidance from the Federal Reserve (Fed) and FDIC remains in effect, continuing to create hurdles for banks that wish to adopt digital asset services fully. She explained that Operation Choke Point 2.0 isn’t over until the Fed and FDIC also rescind their anti-crypto guidance and Custodia Bank has its Fed master account. Early in 2023, Custodia Bank was denied a master account, which would give it access to the Fed’s liquidity facilities. Based on this, her stance is that the 