The Office of the Comptroller of the Currency today published an interpretive letter rescinding the agency’s policy on bank engagement with cryptocurrency “to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system,” according to an agency statement.
During the Biden administration, the OCC and other banking regulators often emphasized the risks that digital assets pose to the financial system in their guidance and statements to the industry. The Trump administration and Republican lawmakers have argued that those actions led to “debanking” of individuals and companies in the crypto sector.
The OCC’s Interpretive Letter 1183 states that cryptoasset custody, certain stablecoin activities and participation in independent node verification networks, such as distributed ledger, are permissible for national banks and federal savings associations, the agency said. The letter also rescinds the requirement for OCC-supervised institutions to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in crypto activities.
The OCC also withdrew from two joint agency statements to banks on cryptoasset risks and liquidity risks resulting from cryptoasset market vulnerabilities. The guidance was issued in 2023 following the collapse of crypto exchange FTX.
“Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology,” Acting Comptroller Rodney Hood said.
In a statement, American Bankers Association President and CEO Rob Nichols applauded the OCC’s decision.
“ABA has strongly advocated that these misguided policies, which created an atypical standard for many product and technology implementations, be rescinded,” Nichols said. “Banks have a critical role to play in the digital asset ecosystem, which has the potential to be a catalyst for change in traditional financial markets, and the OCC’s actions today are an important step toward enabling that success.”
