OCC confirms banks can offer crypto custody without prior approval

Key Takeaways

The OCC confirms that nationwide banks can present crypto custody and stablecoin companies with out prior approval.
Banks should implement sturdy threat administration controls equal to conventional banking operations when partaking in crypto actions.

The Workplace of the Comptroller of the Foreign money (OCC) has clarified that nationwide banks can now provide crypto custody and stablecoin companies with out prior regulatory approval.

The company’s newest steering, Interpretive Letter 1183, confirms that banks and federal financial savings associations can have interaction in these actions beneath current banking legal guidelines.

The steering eliminates a earlier requirement for OCC-supervised establishments to acquire supervisory nonobjection earlier than partaking in crypto-related actions.

Banks should keep sturdy threat administration controls, just like these required for conventional banking operations.

“The OCC expects banks to have the identical sturdy threat administration controls in place to assist novel financial institution actions as they do for conventional ones,” stated Performing Comptroller of the Foreign money Rodney E. Hood.

Hood added that the choice reduces the burden on banks to interact in crypto-related actions and ensures that the OCC treats these actions constantly, whatever the underlying know-how.

The company has additionally withdrawn from earlier joint regulatory statements regarding crypto-asset dangers and liquidity dangers in crypto markets, which had warned banks about potential volatility and operational points within the sector.

The regulatory replace suggests a broader initiative to include crypto actions into the federal banking system beneath established regulatory frameworks.