OCC Allows Banks To Handle Customer Crypto Assets
2min read 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 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.
Ask Aime: "Can banks hold and manage crypto assets according to recent OCC guidelines?"
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, ensuring compliance with relevant regulations.
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, allowing for 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. This shift is not merely a trend but a transformation in financial services. 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 development aligns with the broader regulatory environment, which has seen a friendlier attitude toward crypto since the current administration came into power.
In April, the US Federal Reserve withdrew guidance that deterred banks from engaging in crypto and stablecoin activities. Additionally, the US President signed a joint congressional resolution overturning a previous rule that would have required decentralized finance protocols to report transactions to the Internal Revenue Service. These actions reflect a growing acceptance of crypto within the financial regulatory landscape.
The OCC's clarification is expected to have significant implications for the financial industry. Banks can now legally buy, sell, and custody digital assets on behalf of their clients, providing more secure and regulated options for managing digital assets. This move is likely to enhance the integration of crypto assets into traditional financial systems, aligning with the growing demand for crypto services.
