Skip to content
- U.S. banks can now offer crypto custody and trade execution services without prior regulatory approval, per OCC Interpretive Letter 1184.
- Regulators have removed the requirement for ‘no objection’ letters, easing entry into the crypto market for traditional financial institutions.
- Federal regulators allow banks to partner with third-party crypto service providers, as long as they comply with regulations.
The U.S. Office of the Comptroller of the Currency (OCC) announced that federally chartered banks and savings associations are now permitted to offer crypto-related services, including custody and trade execution, without requiring prior regulatory approval. This new directive, detailed in Interpretive Letter 1184, marks a pivotal moment in the U.S. government’s approach to integrating digital assets into the traditional banking sector.
Under the revised rules, financial institutions no longer need to obtain a “letter of no objection” from regulators before offering crypto services. Regulators have removed restrictions that the Biden administration had put in place. This change allows banks to expand their services in the rapidly growing digital asset market.
The OCC’s latest guidance builds upon its previous letters (1170 and 1183), which approved services such as trade execution, crypto custody, and sub-custodian partnerships. The update clearly states that banks can now outsource these services to third-party providers. However, they must ensure full compliance with federal regulations, including robust cybersecurity and risk management protocols.
OCC Eases Crypto Regulations for U.S. Banks
This significant shift in policy follows the OCC’s March update, which eliminated the need for pre-approval for crypto-related activities. The change is designed to simplify the process for banks to engage with crypto responsibly. It ensures that their services meet the necessary legal and security standards.
In response to the OCC’s decision, the House Financial Services Committee described the move as “a step forward in building a digital asset regulatory framework,” noting that it aligns with the pro-growth policies that were a hallmark of the Trump administration. The committee emphasized the clarity this development brings. It provides a clearer path for traditional financial institutions to engage with the burgeoning crypto sector.
Senator Cynthia Lummis, a staunch advocate for digital assets, expressed her support, stating that the U.S. must “embrace digital assets fully or risk falling behind” in the global race for digital finance leadership. Legal experts, including Katherine Kirkpatrick Bos, view the OCC’s update as a key turning point, marking the beginning of the normalization of cryptocurrency within the U.S. banking system.
Why This Matters for the Crypto Industry
Banks can now move forward with offering crypto services without the need for “no objection” letters, eliminating the lengthy approval process. Additionally, third-party providers are now allowed, enabling financial institutions to partner with regulated crypto firms and expand the range of crypto offerings available to consumers. The update also includes approved custody and trade execution. It paves the way for banks to offer comprehensive crypto services, such as secure custody and seamless trade execution.
The OCC’s decision is a major leap toward mainstream adoption of digital assets within the U.S. banking sector. With the global digital asset race heating up, this policy shift ensures that the U.S. remains competitive and open to innovation in the rapidly evolving financial landscape. Regulators have now opened the door for more traditional financial institutions to enter the crypto space. This move creates new opportunities for investors, consumers, and the broader digital economy.
Related | Binance Confirms Full Support for Ethereum Prague Hard Fork Upgrade
