New Rules Let Banks Dabble In Crypto

The Office of the Comptroller of the Currency (OCC) has loosened the reins to let banks play around with cryptocurrencies, no longer requiring they ask for permission first.

Scrapping earlier guidelines from 2021, the agency’s latest missive enables national banks to dip their toes into activities like crypto asset custody, stablecoin reserves, and blockchain payments without checking with the supervisor first. The goal is to spur responsible innovation in the wild west of digital assets.

“We trust banks to manage risks as they experiment with crypto,’ said Acting Comptroller Rodney Hood. “But make no mistake, safety and soundness still matter as this technology goes mainstream.”

The updated guidance gives a green light for services introduced under former Comptroller Brian Brooks, like letting banks hold crypto, back stablecoins, or validate blockchain transactions. No need to ask for the keys when you want to take the car for a spin.

Banks aren’t getting a blank check, however. With great power comes great responsibility. They need to prove they can handle volatility, hacking, money laundering and other crypto shenanigans. But less red tape should mean more room for experimentation.

The new crypto guidelines fit the OCC’s agenda to keep banks competitive in a digital age while protecting the financial system. But expect more coordination with other regulators before crypto becomes business as usual.