Alternative Investment

OCC Gives Banks the Green Light for Crypto Services

In March 2025, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1183 (IL 1183), providing long-awaited clarity on the role of banks in cryptocurrency. This letter confirms that national banks can now engage in cryptocurrency services, such as crypto-asset custody, distributed ledger, and stablecoin activities, as long as they adhere to the same rigorous risk management practices required for traditional banking activities.

The new guidance removes the previous requirement for banks to seek supervisory approval before engaging in these activities, streamlining the process for banks to offer crypto-related services. This shift provides banks with a clearer path to enter the crypto market and meet the growing demand for digital asset services, while ensuring they operate within a regulated and secure framework.

Banks are still prohibited from holding cryptocurrencies for their own accounts until the FDIC and Federal Reserve withdraw their joint statement on crypto risks, but this move is a significant step toward integrating cryptocurrency into the traditional banking system. By offering crypto services within a regulated environment, banks can provide customers with safer, more reliable access to digital assets, potentially reducing the risks seen with unregulated platforms.

This change has the potential to reshape the banking landscape, creating new revenue opportunities for financial institutions and bringing greater stability and trust to the cryptocurrency market. As other regulatory bodies like the Federal Reserve and FDIC align with the OCC’s stance, the future of cryptocurrency in banking looks poised for growth, bridging the gap between traditional finance and the digital asset world.