The Office of the Comptroller of the Currency (OCC), the US regulatory body responsible for overseeing national banks, issued a significant clarification on Friday regarding crypto activities. The OCC announced that banks are now permitted to engage in certain crypto-related operations without seeking prior regulatory approval, giving the green light for banks to custody digital assets.
The OCC statement outlined specific crypto activities that national banks can now undertake, including crypto-asset custody services, certain stablecoin operations, and participation in distributed ledger networks, enabling them to become validators on public Proof-of-Stake networks.
The announcement marks a step change in this administration’s regulatory approach, eliminating the requirement that banks obtain advance permission from regulators before engaging in these activities.
Under Biden, bank personnel were required to inform their supervisors about planned crypto activities, demonstrate their risk management strategies, and ensure there were no objections from supervisory bodies. The OCC also withdrew its previous statements that cautioned banks against engaging with the crypto sector. Acting Comptroller Rodney Hood affirmed:
“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. Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive while maintaining a strong federal banking system.”
“Biggest news of the day,” commented Nic Carter, partner at Castle Island Ventures and the cofounder of blockchain data aggregator Coinmetrics.io. “Goodbye, Operation Chokepoint 2.0,” posted Alexander Grieve, VP of Government Affairs at Paradigm.
This announcement coincided with the White House Crypto Summit and followed President Donald Trump’s executive order establishing a strategic reserve for Bitcoin and other select cryptocurrencies.
Despite the bullish news for the crypto sector, Custodia Bank founder and Wyoming Blockchain Task Force member Caitlin Long cautioned that Operation Chokepoint 2.0 would not be over until the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) also rescinded their detrimental anti-crypto guidance, and Custodia Bank is awarded its Fed master account.
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