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OCC Confirms Banks Can Offer Crypto Custody Without Prior Approval
The Office of the Comptroller of the Currency (OCC) has issued a significant update regarding the provision of crypto custody services by national banks. In an interpretive letter, the agency has clarified that banks and federal savings associations can now offer crypto custody and stablecoin services without prior regulatory approval.
This development eliminates the need for OCC-supervised institutions to obtain supervisory nonobjection before engaging in these activities. The decision is seen as a major step forward in mainstreaming cryptocurrency into traditional financial systems.
The OCC’s new guidance, Interpretive Letter 1183, confirms that banks and federal savings associations can engage in crypto-related activities under existing banking laws. This means that national banks are now free to provide custody services for digital assets such as Bitcoin (BTC) and Ethereum (ETH), without first seeking approval from the agency.
To ensure compliance with regulatory requirements, the OCC has emphasized the importance of robust risk management controls. Banks must maintain these controls equivalent to those required for traditional banking operations. This includes maintaining adequate policies, procedures, and controls to safeguard digital assets held in custody.
In a statement, Acting Comptroller of the Currency Rodney E. Hood explained that this decision aims to reduce the burden on banks to engage in crypto-related activities while ensuring consistency with existing regulatory frameworks. “The OCC expects banks to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones,” he noted.
It is worth noting that this development aligns with the overall trend of increased recognition and adoption of cryptocurrency by mainstream financial institutions.
Source: https://cryptobriefing.com/occ-allows-crypto-custody-services/
