In a break from restrictive Biden-era policies, OCC-supervised banks may now engage in crypto without supervisory nonobjection, potentially opening new avenues for innovation.
By Arthur S. Long, Parag Patel, Pia Naib, and Deric Behar
On March 7, 2025, the Office of the Comptroller of the Currency (OCC) reaffirmed that national banks and federal savings associations (collectively, banks) may participate in a range of cryptocurrency activities, including crypto custody, certain stablecoin activities, and participation in independent node verification networks.
Specifically, the OCC issued Interpretive Letter 1183, which rescinds Biden-era Interpretive Letter 1179 (November 18, 2021). Interpretive Letter 1179 directed that the activities addressed in previous OCC interpretive letters (i.e., 1170 (bank crypto custody), 1172 (bank stablecoin reserve holding), and 1174 (banks acting as a node on a distributed ledger)) were legally permissible, provided the bank could demonstrate, to the satisfaction of its supervisory office, that it had controls in place to conduct the activity in a safe and sound manner.
The OCC stated in Interpretive Letter 1183 that the permissibility of the activities described in Interpretive Letters 1170, 1172, and 1174 were reaffirmed, and that the supervisory nonobjection process described in Interpretive Letter 1179 “is no longer necessary.” The OCC stated that its staff has increased its knowledge and supervisory expertise regarding cryptoasset activities. As part of its ongoing supervisory process, the OCC will, however, further examine the activities described in Interpretive Letters 1170, 1172, and 1174.
According to the OCC, the rescission of Interpretive Letter 1179 aims to:
- reduce the burden on supervised entities to engage in crypto-related activities;
- encourage responsible innovation;
- enhance transparency; and
- ensure that OCC bank supervision remains technology neutral.
Although Interpretive Letter 1179 is rescinded, the OCC reminded banks that all crypto activities must be conducted “in a safe, sound, and fair manner and in compliance with applicable law,” “consistent with sound risk management practices,” and “align[ed] with banks’ overall business plans and strategies.”
The OCC also simultaneously withdrew itself from two interagency statements that reflected the federal banking regulators’ “careful and cautious” approach to crypto under the Biden administration: (i) the Joint Statement on Crypto-Asset Risks to Banking Organizations (January 3, 2023) (for more information, see this Latham blog post), and (ii) the Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities (February 23, 2023).
Relatedly, on March 12, 2025, the OCC announced that it was hosting a series of virtual office hours with its Office of Financial Technology (beginning May 6-8, 2025). The OCC encourages banks and fintechs to “engage with OCC staff on matters related to bank-fintech partnerships, cryptocurrency activities, or other matters related to responsible innovation in the federal banking system.”
Conclusion
The OCC’s announcements continue the trend in which federal financial market regulators are taking a fresh and more constructive look at crypto-related policies, rules, regulations, proposals, and guidance (for more information, see this Latham blog post; this Latham blog post; and this Latham blog post).
They also align with the Trump administration’s commitment to dismantling the previous administration’s antagonistic stance toward crypto — dubbed “Operation Checkpoint 2.0” (for more information, see this Latham blog post) — which effectively prevented banks from engaging with digital asset companies or innovating their own digital asset products and services.
These moves by the OCC are critical to opening the channels for banks to engage with blockchain technology in ways that have so far been inaccessible. A more cooperative approach by the federal banking regulators will likely result in increased TradFi and crypto integration in key areas such as custody, stablecoins, and blockchain-based payment solutions. And the reach of the OCC’s actions may extend beyond banks subject to OCC regulation under state “wild card” laws permitting state banks to engage in activities that are permissible for national banks.