OCC asserts banking activities in crypto, cancels the surveillance rule

On March 7, the OCC issued The interpretative letter 1183 and an accompanying statement The affirmation of prior guidance regarding the fact that national banks and federal savings associations can be engaged in cryptocurrency activities, including (i) providing custody services for crypto-deferrent assets, (ii) holding stablecoin “reserves”, (III) facilitating stablecoin payments (IV) lock. Important is the letter canceled and the OCC The interpretative letter 1179who forced banks to obtain non-objective written surveillance before engaging in these cryptocurrency activities.

What does that mean for banks

Specifically, banks are authorized:

• Offer of crypto-actual arrest services: Banks are authorized to own unique cryptographic keys associated with customer cryptocurrency wallets, allowing them to own cryptocurrency products on behalf of depositors.
• Keep stablecoin “reserves”: In general, Stablecoins are a type of cryptocurrency designed to maintain a stable value. Their value is often linked to Fiat coins such as the US dollar. Stablecoins issuers may want to place assets in a reserve account with a bank to ensure that the issuer has sufficient assets that support Stablecoin (usually on 1: 1). Banks can now own stablecoin reserves on behalf of Stablecoin issuing.
• Check for blockchain -based payments: Banks are authorized to participate in blockchain networks by validating, storing and registering chain transactions as a form of payment processing, which includes facilitating Stablecoin transactions. The OCC has stated that it watches the facilitation of blockchain -based payments as an evolution of traditional banking functions.

Also, the OCC explained that, while national banks and federal economy associations can be involved in these activities, they must align with solid risk management practices and ensure compliance with applicable laws, including ensuring adequate capital and liquidity to support crypto.

Putting into practice: The OCC Declaration offers a perspective on the perspective of the new administration on banks’ roles in the Crypto ecosystem in rapid evolution and coincides with other federal regulatory authorities, including Securities and Exchange Commission, changing priorities related to crypto (discussed Here) By eliminating the requirement of non-objective supervision, the OCC signals a change in its regulatory approach, following the reduction of barriers for banks that explore the crypto services. As the regulatory landscape evolves, financial institutions should closely monitor additional guidance from the OCC and other federal agencies to adapt their crypto -consequence conformity strategies.

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