OCC Eases Crypto Regulations for Banks, Paving the Way for Innovation

The Office of the Comptroller of the Currency (OCC) has taken a significant step toward embracing cryptocurrency within the banking sector. On March 7, the agency confirmed that national banks and federal savings associations are now authorized to engage in select crypto-related activities. This decision, outlined in Interpretive Letter 1183, provides clarity on the permissibility of crypto-asset custody, certain stablecoin transactions, and participation in distributed ledger networks.

One of the most notable changes is the removal of the requirement for OCC-supervised institutions to seek prior supervisory approval before engaging in cryptocurrency activities. Previously, banks needed to demonstrate sufficient controls and obtain nonobjection from regulators. With the rescission of Interpretive Letter 1179, issued in 2021, the OCC has also withdrawn from two interagency statements that previously outlined crypto-related risks for banks.

The OCC oversees around 1,200 national banks and federal savings associations, along with 50 federal branches of foreign banks, collectively managing over two-thirds of all commercial banking assets in the U.S. Acting Comptroller of the Currency Rodney E. Hood highlighted the importance of maintaining strong risk management controls while reducing regulatory barriers.

“The OCC expects banks to uphold the same rigorous risk management standards for novel activities as they do for traditional banking operations,” Hood emphasized. He further noted that the regulatory shift ensures banks engaging in cryptocurrency activities are treated consistently, regardless of the underlying technology.

The agency reassured that crypto-asset oversight remains a priority, particularly concerning custody services, stablecoin reserves, and distributed ledger-based payments. By rolling back previous guidance and stepping away from restrictive interagency statements, the OCC signaled a shift toward a more open regulatory framework. This move aims to encourage responsible innovation, enhance transparency, and allow both national and community banks to participate more freely in the evolving digital asset space.