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U.S. Banking Regulators Clear Path for Crypto Custody With Strict Oversight
July 14, 2025
In a recent joint statement, the Office of the Comptroller of the Currency (OCC), Federal Reserve, and FDIC have issued guidance on how banks should approach crypto custody. While this move does not introduce new rules, it reiterates that institutions must comply with existing legal, compliance, and risk standards.
According to the statement, banks can act as custodians for cryptocurrency assets in both fiduciary and non-fiduciary roles. However, regulators emphasize that these services must be managed within the confines of traditional financial regulations. This means that banks cannot circumvent existing compliance frameworks, even with new financial instruments like cryptocurrencies.
A crucial aspect highlighted in the guidance is the importance of key custody. It appears that if a bank holds private cryptographic keys on behalf of customers, it will be fully liable for any losses or breaches. Regulators stress that no customer should have direct access to these keys, ensuring that accountability lies entirely with the bank when taking control.
Banks may opt to outsource crypto custody services to third-party vendors but must still meet the same risk and compliance standards. Institutions are expected to conduct thorough due diligence on these vendors and continuously monitor their performance. It is essential for banks to guarantee that such partners comply with identical regulatory requirements, including issues like key security, anti-money laundering (AML), sanctions compliance, and market risk exposure.
To summarize, the guidance confirms that banks can store cryptocurrency assets but must do so within existing legal frameworks. This decision highlights the significant risks involved in crypto custody and requires institutions to operate under strict discipline.
Source: blockonomi.com
