U.S. OCC Clarifies Banks’ Authority in Crypto Activities
The U.S. Office of the Comptroller of the Currency (OCC) has issued new guidance affirming that national banks can engage in specific cryptocurrency activities, including crypto-asset custody, certain stablecoin operations, and participation in distributed ledger networks. This clarification removes previous requirements for banks to obtain prior regulatory approval before engaging in such activities.
Rescission of Prior Guidance
The OCC’s latest statement rescinds earlier guidance from the Biden administration, which had mandated that banks seek approval from regulators and demonstrate adequate risk management controls before engaging in cryptocurrency activities. This move aims to reduce the regulatory burden on banks and ensure consistent treatment of crypto-related activities, irrespective of the underlying technology.
Emphasis on Risk Management
Acting Comptroller Rodney Hood emphasized that, despite the removal of prior approval requirements, banks must still implement robust risk management protocols when engaging in cryptocurrency activities. The OCC’s stance underscores the importance of maintaining sound risk management practices, regardless of technological advancements.
Concurrent Developments in Cryptocurrency Policy
The OCC’s announcement coincided with a White House cryptocurrency summit and an executive order by President Donald Trump establishing a strategic reserve for bitcoin and select other cryptocurrencies. These developments reflect a broader governmental effort to integrate cryptocurrencies into the financial system while ensuring appropriate regulatory oversight.
Withdrawal from Previous Joint Statements
In addition to updating its guidance, the OCC withdrew from prior joint statements issued with other U.S. regulators that had cautioned banks about the volatility within the cryptocurrency sector. This withdrawal signifies a shift toward a more accommodative regulatory environment for banks engaging in crypto-related activities.