OCC: Banks Can Buy and Sell Their Customers' Crypto Assets Held in Custody
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A recent announcement from the U.S. Office of the Comptroller of the Currency has set a significant precedent, allowing national banks to engage in purchasing and selling cryptocurrency assets on behalf of their customers. Moreover, these banks are now permitted to delegate crypto custody and trading tasks to external entities.
In a notable shift in policy, the OCC has loosened its grip on the banking sector regarding cryptocurrencies. The guidance issued specifies that banks can actively participate in managing their clients' crypto investments, as well as collaborate with third-party service providers for various crypto-related operations. This newfound flexibility aligns with safety and financial stability criteria outlined by the regulator.
This latest development comes hot on the heels of previous directives from March which eliminated the need for bankers to seek approval before delving into cryptocurrency ventures. Observers note a transformative shift underway at the OCC, with Katherine Kirkpatrick Bos highlighting how traditional banking practices are converging with crypto services. Embracing third-party involvement is particularly advantageous for compliant cryptocurrency service providers under regulation.
Don't miss out: OCC's decision opens doors for banks to partake in crypto custody activities alongside stablecoin endeavors.
OCC: Banks Can Buy and Sell Their Customers' Crypto Assets Held in Custody
A new policy directive from the U.S. regulator of national banks says the institutions can also outsource crypto custody and execution to outside parties.
- The Office of the Comptroller of the Currency is further letting bankers off the crypto leash, clarifying through letters Wednesday that banks can buy and sell their customers' crypto assets.
- The banks can also use third-party servicers on crypto work, the OCC said.
- This follows earlier OCC guidance — matched by the Federal Deposit Insurance Corp. and the Federal Reserve — that reversed a previous policy restricting bankers to getting signoffs from the regulator before they could move on crypto matters.
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The newly explained policy stance released by the OCC on Wednesday also clarified that the bankers can outsource crypto activities to third parties, including custody and executive services. As long as it all still checks the boxes of the watchdog's safety-and-soundness requirements, the OCC is giving the banks more crypto freedom.
This week's move follows the agency's March reversal of a longstanding policy that demanded bankers check with their government supervisors before moving ahead with new crypto business. "These letters signal a shift in the OCC's approach," Katherine Kirkpatrick Bos, Starkware general counsel and a former chief legal officer at Cboe Digital, noted on social media site X. She said the agency now seems to be melding crypto into traditional banking. And the additional guidance that third-parties are okay "is a boon to regulated crypto native service providers."
Read More: OCC Says Banks Can Engage in Crypto Custody and Certain Stablecoin Activities
