U.S. Regulators Allow Banks to Manage Cryptocurrencies

The U.S. economy has witnessed a significant shift with a landmark joint declaration favoring cryptocurrencies, coinciding with Bitcoin’s rise. Historically, the Biden administration took a skeptical stance towards digital currencies, yet recent developments indicate a major policy turnaround. This groundbreaking crypto proclamation spells a promising future for the industry.

A joint communication from the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve has emerged concerning banks and digital asset management. This officially acknowledged the feasibility of banking institutions managing cryptocurrencies parallel to traditional assets, marking a major deviation from previous cautionary advisories. Crypto custody services are defined as the management of digital assets on a client’s behalf. This new policy empowers banks to extend other fiduciary services alongside these custody offerings, whether through fiduciary relationships or not.

Within this new framework, banks can administer both custody and management operations for cryptocurrencies. The directive emphasizes the requirement for experienced personnel to oversee such services. It further encourages proactive risk management strategies in place. The Federal Deposit Insurance Corporation, Federal Reserve Board, and OCC collectively stated that federal banking regulatory agencies have issued a joint statement as part of their efforts to clarify banks’ activities related to crypto assets. The statement highlights potential risk management considerations for banks holding crypto assets for clients or offering related custodial services.

The release highlights current risk management practices for handling crypto assets while emphasizing compliance with legal and regulatory guidelines. While not establishing new supervisory norms, agencies are committed to clarifying banks’ crypto-related operations. Key conclusions drawn include that banks can now officially manage crypto in the same way as conventional assets. There is no introduction of new supervisory expectations, maintaining focus on current regulations. Emphasis is placed on proactive risk management strategies for crypto asset handling.

These updates, initiated during the previous administration, grant banks more freedom in engaging with cryptocurrency services, indicating a promising shift in the industry’s landscape. U.S. banking regulators have issued comprehensive guidelines for banks to offer cryptocurrency custody services, marking a significant shift in the regulatory landscape for digital assets. The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) have jointly clarified the rules for banks that wish to hold cryptocurrency assets for their customers. This move aims to standardize crypto custodial practices across banks, ensuring safe execution and compliance with existing laws.

The regulators emphasized the need for banks to implement robust systems to manage the risks associated with crypto custody, including hacking, system failures, and the loss of private keys. Banks are permitted to hold crypto assets for their customers in either a fiduciary or non-fiduciary capacity. In fiduciary safekeeping, banks act on behalf of the customer with legal authority, similar to a trustee or investment advisor. In this scenario, banks must adhere to specific federal rules under 12 CFR 9 or 150, as well as any applicable state laws or agreements. For non-fiduciary safekeeping, banks must still protect the assets with strong systems to guard against various risks. The agencies stressed that any bank offering this service must build a solid risk-management framework and update it as the crypto market evolves.

The statement also noted that the crypto world is rapidly changing, and banks need to keep up with these changes. Any bank offering crypto storage must follow the law and ensure that all activities are conducted in a safe and sound manner, similar to other banking services. The regulators have been issuing several updates to guide banks in the crypto space. In May, the OCC confirmed that banks are now allowed to buy and sell crypto for themselves. The FDIC also changed its approach, stating that banks do not need to get permission before starting crypto activities.

The joint guidance aims to standardize crypto custodial practices across banks, ensuring safe execution and compliance. The agencies reminded banks that such activities must be conducted in a safe and sound manner and in compliance with applicable laws. The statement also emphasized the need for banks to plan ahead, check their safety measures, and be ready to fix problems quickly. The evolving nature of the crypto-asset market requires banks to consider the risks involved and implement strong systems to manage these risks effectively.

While a bank can hold crypto assets on behalf of a client, the agencies reaffirmed that the liability for safekeeping rests with the bank. As such, banks have to assume full control of the assets, in this case, the keys. Per the guidance, a banking organization has to “reasonably demonstrate” that no other party, including the customer, can access the assets while still under the safekeeping of the bank. Banks are also allowed to use third-party custody vendors. However, the bank in question is the one responsible and will be liable for the third party’s actions.

The Federal Reserve, FDIC, and OCC’s statement comes amid an observable shift in the regulatory approach to bank and crypto in the U.S. The FDIC, for instance, released documents related to crypto debanking in February 2025, and in March, clarified that banks can engage in crypto-related activities without having to seek prior approval from the agency. The Federal Reserve also issued a similar guidance in April. This shift indicates a more open approach to supervising bank involvement in crypto assets, paving the way for institutional adoption and integration of digital assets into traditional banking services.