#What Does the OCC's New Guidance Allow for National Banks?
The recent Interpretive Letter 1184 issued by the Office of the Comptroller of the Currency on May 7, 2025, empowers national banks and federal savings associations to engage in the buying and selling of digital assets for their customers. This marks a significant shift in how banks can operate in the digital asset space.
The OCC's letter outlines that national banks can execute digital asset transactions at the direction of their customers. Notably, banks are not required to create their own digital asset infrastructures. The guidance makes it clear that they can outsource custody and execution functions to third-party service providers, ensuring that robust risk management frameworks are established. This flexibility allows banks to adapt to the evolving digital asset marketplace more efficiently.
#What Types of Digital Assets are Covered?
Interestingly, the guidance from the OCC does not specify any individual tokens or digital assets. The broad language used in the letter ensures that banks have the latitude to engage with a wide array of crypto assets. This adaptability may lead to more diverse offerings in the banking sector and could enhance customer choice.
Banks planning to provide these services no longer need prior supervisory approval, which streamlines the process significantly. Instead, they must adhere to safety and soundness standards, focusing on diligent risk management practices.
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#How Did We Reach This Point in Banking?
The move towards allowing banks to manage digital assets traces back to 2020 when the OCC introduced Interpretive Letter 1170, which allowed national banks to offer cryptocurrency custody services. However, this was subject to a non-objection process that mandated banks to receive regulatory approval before venturing into cryptocurrency activities.
A pivotal moment occurred on March 7, 2025, when the OCC revoked this non-objection requirement, further opening the door for banks. Additionally, in April 2025, the Federal Reserve and the FDIC retracted their earlier joint statements restrictive of crypto activities, solidifying this movement within mainstream banking.