OCC Boosts Banks’ Crypto Service Expansion in 2025

In 2025, OCC lets banks sell cryptocurrency to clients. Banks can outsource crypto custody with risk management. Ruling builds on Interpretive Letters 1170 and 1183. As of May 7, 2025, national banks and federal savings organizations were granted permission by the United States Office of the Comptroller of the Currency (OCC) to buy and sell cryptocurrency assets on behalf of their clients under Interpretive Letter 1184.The directive also gives banks the mandate to outsource custody and execution services to third parties provided that they have in place relevant risk management practices. The last guidance from the OCC continues the tendency of the court to rule in favor of entries of cryptocurrency services into the traditional banking systems, which is the big step towards such integration. This should accelerate the uptake of crypto in the regulated financial institutions in the United States . Banks Find Clarity on Crypto Trading and Custody OCC’s Interpretive Letter 1184 establishes that banks may be involved in crypto-asset activity as instructed by their customers. Additionally, this entails trading custody-based digital assets. Banks are also granted the right to outsource such related services as custody and trade execution, to third parties, provided the procedures to manage risks properly are followed. This ruling is a reaffirmation of the previous guidance issued by Interpretive Letter 1170 on July 2020, which first made clear that banks were allowed to offer crypto custody services. The 2020 letter characterised such activities as a modern-day extension of traditional bank custody services, which banks could outsource to sub-custodians in the management of crypto assets. Subsequently, a clarification in February 2025, in the form of Interpretive Letter 1183, widened the horizon of acceptable activities. It identified crypto-asset custody, stablecoin functions, and distributed ledger involvement as permissible for banks, as long as they have sufficient risk controls. The OCC stressed that banks had to guarantee that all crypto related activities are regulated by the relevant laws and customer agreements. Institutions which operate in a fiduciary capacity are subject to federal fiduciary regulations and are able to operate safely and legally. Regulatory shift supports wider crypto adoption. The OCC’s May 2025 guidance eliminates barriers that had previously necessitated banks to seek supervisory approval to operate in crypto activities. This is consistent with greater regulatory change across the current administration that has aimed to simplify banks’ participation in the digital asset world. In March 2025, the OCC had already withdrawn the requirement of obtaining prior non-objection by the supervisors for crypto-related services. This previous move was viewed as a deregulatory step by which banks could treat crypto activities in a similar manner to other banking activities. The most recent ruling highlights the necessity of third-party risk management in outsourcing crypto services. Banks still have the responsibility of regulating these providers in order to safeguard customer assets and meet legal requirements. This is a result of collaborative efforts by U.S. regulatory agencies to promote digital asset incorporation. For example, the recently second-guessed supervisory letters from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), which had formerly curtailed banks’ relationship with crypto, have become a positive move for the industry. The OCC’s guidance is one of the many steps in the process of regulatory clarity with regards to cryptocurrencies in the U.S.President Trump issued Executive Order 14178 in January 2025, loosening regulations on digital assets and requiring a federal regulatory framework to be proposed within 180 days. By taking this action, the OCC is paving the way for financial institutions to meet the growing demand for cryptocurrency services from their clients without investing much in new infrastructure. The ruling offers a viable option to banks to meet their expansion needs through outsourcing while observing regulation. Source: https://www.livebitcoinnews.com/occ-boosts-banks-crypto-service-expansion-in-2025/