OCC Greenlights Crypto Custody and Execution Services for US Banks

Highlights:

• OCC has published a letter clarifying the execution of crypto services for US banking firms.
• The permitted crypto services include transaction settlements, crypto-to-fiat conversions, trade executions, etc.
• Banking institutions can also outsource the permitted services to third parties under strict regulatory guidelines.

The United States Office of the Comptroller of the Currency (OCC) has announced that US banks can start offering crypto custody and trade execution services to customers. The agency relayed the notice via a May 7 letter issued by acting comptroller Rodney E. Hood.

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According to the publicized letter, banks can outsource the above services to third parties. However, their actions must align with strict risk management and regulatory principles. This clarification from the OCC aims to eliminate limitations that have prevented native banking firms from propelling crypto adoption drives. In addition, it enables a fair competitive playing ground for banks, crypto firms, and other fintech companies.

The OCC has clarified that national banks and federal savings associations may buy and sell custodial crypto assets at the direction of customers and outsource custody and execution services to third parties, provided appropriate third-party risk management practices are in…

— Wu Blockchain (@WuBlockchain) May 7, 2025

Important Details from OCC’s Letter

Under the OCC’s new directive, banking firms will offer all-encompassing fiat and crypto services. These include trading crypto assets held in custody at customers’ request, transaction settlements, crypto-to-fiat conversions, trade executions, etc.

The OCC also noted that banking firms can employ sub-custodians to offer the services above. However, these third parties must possess proper internal risk management practices to safeguard customers’ assets. For banks acting in a fiduciary capacity, the letter stipulated that their actions must be in line with 12 C.F.R. part 9 or 150, as applicable.

The letter read:

“Interpretive Letter 1170 addressed the authority of banks to provide crypto-asset custody services. The letter concluded that banks may provide crypto-asset custody services in a fiduciary or non-fiduciary capacity under applicable statutory authority.”

The OCC states that national banks may purchase and sell crypto assets on behalf of customers and delegate custody and execution to third parties, provided they implement effective risk management.https://t.co/GDRnQWGjyz pic.twitter.com/DwvydEqcOX

— 𝗕𝗮𝗻𝗸XRP (@BankXRP) May 8, 2025

Earlier Permission to Engage in Crypto Activities

In March, the OCC published an Interpretive Letter 1183, clarifying its stance on banking firms’ engagement in crypto activities. In the publication, the OCC said registration is not a requirement for national banks and federal savings associations to offer stablecoin services and crypto custody.

The OCC also noted that banks can participate in some Decentralised Finance (DeFi) activities, including blockchain protocols and independent node verification. It added that banking firm actions must align with existing banking laws. Still, in the same letter, the OCC noted that its new guidance will eliminate previous requirements for OCC-supervised firms, implying that banks will no longer seek supervisory nonobjection approval before offering crypto services.

The OCC also confirmed that its staff now understands crypto and blockchain operations. In addition, the agency said it will ease every old strict rule hindering banking firms from embracing crypto participation. The old regulation stipulates that US banks must inform supervisors, clarify risk management strategies, and get appropriate approvals before offering crypto services.

Crypto Firms Rally to Obtain US Banking Licences

On April 21, Crypto2Community reported that several crypto firms have applied for US banking licenses. The new trend stems from growing crypto support in the US. Many crypto companies applied for different licenses to suit their business models. Some firms opted for industrial bank endorsements, which allow them to operate like traditional banks. Others prefer licenses that permit crypto custody services and stablecoin issuance.

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