The U.S. Office of the Comptroller of the Currency (OCC), the national banking regulator, has revoked Interpretive Letter 1179, paving the way for traditional financial institutions to legally participate in the crypto sector. This move reaffirms that banks can engage in digital asset-related activities, including:
- Digital Asset Custody: Banks are now allowed to offer crypto custody services to individual and institutional clients, ensuring secure storage of digital assets, similar to how traditional assets are managed.
- Holding Stablecoin Reserves: Financial institutions can hold stablecoins as part of their asset management services, supporting the growth of the stablecoin market and enhancing cross-border payment efficiency.
- Operating Blockchain Nodes & Processing Stablecoin Payments: Banks can directly participate in blockchain networks, validate transactions, offer stablecoin-based payment services, and contribute to the expansion of the digital economy.
Impact of This Decision on Banking and Crypto
The OCC’s decision to allow banks to expand into the crypto space not only legitimizes related activities but also creates new opportunities for both traditional finance and the digital asset market. Banks can now leverage blockchain technology to enhance payment services, reduce transaction costs, and improve operational efficiency.
Moreover, this move helps mitigate legal risks, bringing greater transparency and stability to the crypto sector—particularly as many banks were previously hesitant to engage due to unclear regulatory guidance.
However, the OCC emphasizes that financial institutions must still comply with strict risk management standards and regulatory requirements. The agency will continue to closely monitor banks’ activities in the crypto sector to ensure transparency and financial system security.