The Office of the Comptroller of the Currency (OCC) clarified on May 7 that federally chartered banks and savings associations may offer crypto services, namely custody and execution, including through third-party providers, provided they adhere to sound risk management practices and legal compliance. 

The clarification, issued through Interpretive Letter 1184, confirms and expands on earlier guidance related to crypto activities.

The OCC stated that institutions may buy and sell assets held in custody at the customer’s direction and outsource crypto-asset functions, including custody and trade execution services, to third parties. 

These activities remain subject to the same oversight and operational standards applied to traditional financial services, including due diligence, third-party risk management, and cybersecurity protocols.

The letter builds on prior OCC guidance outlined in Interpretive Letters 1170 and 1183. It also reinforces the regulator’s view that digital asset services can fall within the scope of permissible banking activities when conducted safely and in compliance with applicable regulations.

Regulatory context and policy shift

The clarification follows a policy change first announced by the OCC on March 7, which removed the requirement for prior regulatory approval for certain crypto-related activities.

That earlier announcement departed from previous supervisory practices under former President Joe Biden’s administration, when banks needed to notify examiners and receive a letter of no objection before engaging in crypto services.

In its March update, the OCC confirmed that national banks may engage in crypto-asset custody and stablecoin activities and even participate as validators on distributed ledger networks. 

The updated guidance effectively reversed previous cautionary statements and removed procedural hurdles, allowing banks to incorporate crypto services into their operations without seeking advance approval.

At the time, acting comptroller of the currency Rodney Hood said the OCC aimed to streamline oversight while maintaining high safety standards. 

Reinforcing permission

The May 7 letter builds on that policy foundation, formally integrating execution services and sub-custodian relationships into the scope of authorized activity.

The OCC reiterated that institutions must manage associated risks, whether they handle crypto services internally or through third parties.

Interpretive Letter 1184 reaffirms the permission to federally regulated banks to engage with digital assets in a custodial capacity, provided these activities are executed with appropriate safeguards and in compliance with federal banking law. 

The OCC’s updated position affirms crypto services as permissible under existing authorities and signals continued regulatory normalization of digital asset services within the US banking sector.

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