OCC Greenlights Banks to Custody Crypto Assets Stocks Surge

The Office of the Comptroller of the Currency (OCC), the regulatory body overseeing national banks in the United States, issued a significant clarification on Friday regarding cryptocurrency activities. The OCC announced that banks are now permitted to engage in certain crypto-related operations without seeking prior regulatory approval, effectively giving the green light for banks to custody digital assets.

The OCC's statement outlined specific crypto activities that national banks can now undertake. These activities include crypto-asset custody services, certain stablecoin operations, and participation in distributed ledger networks, enabling banks to become validators on public Proof-of-Stake networks. This move marks a significant shift in the regulatory approach, eliminating the requirement for banks to obtain advance permission from regulators before engaging in these activities.

Under the previous administration, bank personnel were required to inform their supervisors about planned crypto activities, demonstrate their risk management strategies, and ensure there were no objections from supervisory bodies. The OCC also withdrew its previous statements that cautioned banks against engaging with the crypto sector. Acting Comptroller Rodney Hood emphasized the importance of strong risk management controls for novel bank activities, stating that the OCC's action would reduce the burden on banks to engage in crypto-related activities and ensure consistent treatment by the OCC, regardless of the underlying technology.

This announcement coincided with the White House Crypto Summit and followed President Donald Trump’s executive order establishing a strategic reserve for Bitcoin and other select cryptocurrencies. Despite the bullish news for the crypto sector, some industry experts cautioned that further regulatory changes are needed to fully support the crypto industry. Caitlin Long, founder of Custodia Bank and a member of the Wyoming Blockchain Task Force, noted that Operation Chokepoint 2.0 would not be over until the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) also rescinded their detrimental anti-crypto guidance, and Custodia Bank is awarded its Fed master account.

The OCC's clarification is part of a broader effort to provide regulatory clarity in the cryptocurrency space. The OCC's Interpretive Letter 1183 confirms that federally regulated banks can engage in various cryptocurrency activities without prior approval. This includes crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks. This regulatory change marks a shift from the previous requirement that banks must obtain prior approval before engaging in crypto activities. The OCC's statement emphasizes that national banks are now permitted