US Banks Get Green Light for Crypto Custody & Trading
The US Office of the Comptroller of the Currency (OCC) has authorized national banks and federal savings associations to offer cryptocurrency custody and trading services to their customers. This significant regulatory clarification removes previous ambiguity and opens the door for greater institutional involvement in the digital asset market.
US Banks Enter the Crypto Market
This decision allows banks to buy and sell cryptocurrencies on behalf of their clients and outsource these services to qualified third parties. The OCC announcement explicitly permits services including:
- Asset settlement
- Trade execution
- Recordkeeping
- Valuation
- Tax reporting
All activities must adhere to existing laws and customer agreements. The OCC reaffirmed that crypto custody is a legitimate extension of traditional banking services, acknowledging the evolving nature of finance.
Outsourcing and Risk Management
Banks are permitted to partner with sub-custodians for asset management, but are ultimately responsible for overseeing all outsourced services. Robust risk management protocols are mandatory to protect customer funds. Third-party providers must employ stringent security measures to safeguard customer assets.
For banks operating under a fiduciary capacity, compliance with relevant federal regulations (parts 9 or 150, depending on the charter) is essential. All crypto-related operations must be conducted safely, soundly, and legally, encompassing both direct and outsourced activities.
Increased Crypto Adoption and Confidence
This decision clarifies previously ambiguous legal territory, specifically addressing the allowance of banks actively executing trades based on customer instructions. This removes a significant barrier to institutional participation in the crypto market and is expected to foster greater trust in crypto services offered by regulated institutions.
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The OCC’s action is a crucial step in promoting responsible crypto adoption within the traditional financial system. This move reinforces the need for robust customer protection and regulatory oversight, enabling banks to expand their service offerings while mitigating risks effectively.