- OCC reaffirmed that cryptocurrency activities are permissible in the federal banking system
- Interpretive Letter 1183 mentions crypto-asset custody, and certain stablecoin activities. and DLTs
The Office of the Comptroller of the Currency (OCC) reaffirmed that cryptocurrency activities are permissible in the federal banking system, namely crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as DLTs.
More About the Important Shift in Crypto-Asset Permissions and Letter 1183
More specifically, the OCC published Interpretive Letter 1183 which confirms that a number of key crypto activities are permissible for national banks and federal savings associations.
Specifically, Interpretive Letter 1183 states that OCC-supervised institutions may engage in crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as DLT.
Also, critically, Interpretive Letter 1183 confirms the removal of the requirements to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in these cryptocurrency activities.
Additionally, the OCC withdrew its participation in the joint statement on crypto-asset risks and liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities.
Acting Comptroller of the Currency Rodney E. Hood said:
“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. 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. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”
Conclusion
A very important announcement, which means that banking institutions and other OCC accountable entities have been given the green light to an unprecedentedly wide range of crypto activities, and the entire crypto sector that they had been totally blocked from.
We can probably expect a very large-scale integration of new players into the crypto industry in the near future, and the market will have a lot of liquidity to swallow. Stay tuned for updates and be aware of the rapidly evolving regulation and crypto landscape.
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