The Office of the Comptroller of the Currency (OCC) published guidance reaffirming permissible cryptocurrency activities for banks while rescinding a requirement for institutions to get supervisory clearance before engaging in such activities. The agency also withdrew the OCC from a joint statement on crypto-asset risks to banking organizations.
According to OCC Interpretive Letter 1183, national banks and federal savings institutions may take custody of crypto assets, take part in certain stablecoin activities, and participate in independent node verification networks, including distributed ledgers.
“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,” acting comptroller of the currency Rodney Hood said in a press release. “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.”
With the letter, the OCC rescinded a requirement for OCC-supervised institutions to receive supervisory nonobjection and demonstrate they have adequate controls in place before they can engage in cryptocurrency activities.
Additionally, the OCC announced its withdrawal from its participation in the joint statement on the risks crypto-assets pose to banking organizations, published Jan. 3, 2023, and a joint statement on liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities, published Feb. 23, 2023.
Both joint statements have been removed from the OCC’s website but remain available on the Federal Reserve’s website and the Federal Deposit Insurance Corp.’s website. Both statements highlight risks presented by the “significant volatility” of crypto assets and bank vulnerabilities exposed by the crypto-asset sector in the year prior to the release of both statements.