OCC Clears Way for Banks to Trade Crypto on Behalf of Customers

OCC’s New Rule: Banks Allowed to Buy & Sell Crypto for Customers

OCC– The U.S. Office of the Comptroller of the Currency (OCC) has confirmed that banks under its jurisdiction can now trade cryptocurrency on behalf of customers and outsource certain crypto services to third parties. This update signals a more accommodating stance toward cryptocurrency integration within the banking system.

Banks Can Trade Crypto for Customers

Acting Comptroller Rodney Hood announced in a May 7 letter that banks and federal savings associations are authorized to buy and sell crypto assets held in custody at the direction of their customers. This allows financial institutions to engage in crypto activities without breaching any existing regulations.

Outsourcing Crypto Services to Third Parties

The OCC’s new guidelines also permit banks to outsource permissible crypto activities, including custody and execution services, to third parties. In addition, banks may offer other related services such as record keeping, tax, or reporting services, all while adhering to the appropriate risk management protocols. According to Hood’s statement, sub-custodians can be used to provide these services, ensuring compliance with third-party risk management practices.

Industry Reactions: Support for the OCC’s Decision

The new OCC guidelines have been well-received by the crypto industry. Katherine Kirkpatrick Bos, general counsel at StarkWare, noted that the letters mark a “shift in the OCC’s approach,” moving toward integrating cryptocurrency within the banking system. This shift allows banks to re-enter the crypto market without facing existential regulatory risks.

Additionally, Coinbase’s Chief Policy Officer, Faryar Shirzad, praised the move, emphasizing the importance of regulatory clarity and adherence to supervisory best practices. The decision aligns with the growing recognition of cryptocurrency’s role in the financial ecosystem.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.