The Office of the Comptroller of the Currency (OCC) clarified that federal banks can engage in the cryptocurrency industry, thereby lifting previous obstacles.
After the United States adopted Bitcoin and some altcoins as reserve assets, the federal regulator moved to encourage engagement with cryptocurrencies. Specifically, the OCC lifted a previous provision that discouraged financial institutions from providing services to the digital asset industry.
In a statement on Friday, the Office of the Comptroller of the Currency clarified that federal banks can participate in some virtual asset-related projects. It is noteworthy that this new wave of regulatory clarity aligns with the demands of the emerging industry and financial institutions.
Now banks can offer services to crypto companies
The published interpretive letter number 1183 explicitly clarified that banks can participate in the custody of cryptocurrencies, some stablecoin projects, and the verification of distributed ledgers. Furthermore, the OCC rescinded previous guidance that stated national banks and federal savings associations must seek regulatory approval before engaging in the digital asset industry. Meanwhile, the new policy disrupts the guidelines set by the previous Biden administration.
This aligns with Trump's promise to reverse what he calls the tyranny of the four-year Democratic presidency over cryptocurrencies.
Rodney E. Hood, the acting Comptroller of the Currency, stated that clarity addresses federal banks' doubts about providing services to the crypto sector.
However, financial institutions are expected to implement appropriate risk management measures, as they do with traditional assets.
Clarity is essential
Furthermore, the OCC announced the withdrawal of participation in a previous joint circular that discouraged banks from engaging in cryptocurrencies, citing their risks and market fragility.
While the 2023 statement did not outright ban national banks from cryptocurrency-related services, it created caution and skepticism. Notably, Coinbase attempted to pressure the OCC to issue this statement last month.
In February, the leading exchange sent a letter to federal regulators requesting a public stance to ease friction between the digital industry and banks. Market watchers described the recent development as positive, especially for assets like XRP.
Analyst Amonyx shared this sentiment, especially since the new stablecoin launched by the RLUSD ecosystem may gain wide acceptance.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the author's personal opinions and do not reflect my opinion. Readers are encouraged to conduct thorough research before making any investment decisions. I am not responsible for any financial losses.
