National banks and federal savings associations based in the world’s largest economy, the United States, must meet specific conditions before engaging in cryptocurrency activities, according to the Office of the Comptroller of the Currency (OCC).
In order to engage in certain cryptocurrency, distributed ledger and stablecoin activities, national banks and federal thrift institutions must show that they have adequate controls in place.
Additionally, the OCC clarifies that issues previously covered in interpretive letters issued in 2020 and early 2021.
After notifying their supervisory office, banks can provide cryptocurrency custody services, hold dollar deposits that support stablecoins, act as nodes for distributed ledgers to validate payments, and participate in specific stablecoin activities to facilitate payments on blockchain networks.
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The letter clarifies that the activities addressed in previous interpretive letters may be conducted if a bank notifies its supervisory office of its intention to engage in the activities and after the supervisory office confirms that the activities are not objectionable. Until it receives a non-objection from its supervisory office, the bank should not engage in the activity.
According to Michael J. Hsu, the Acting Comptroller of the Currency, “OCC’s regulatory measures are designed to ensure that financial institutions in its sphere operate safely and responsibly.
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“Banks must be able to demonstrate that they have reasonable risk management systems and controls in place in order to safely implement these technologies and products. In this way, we can ensure that crypto-asset activities conducted within Federal regulatory perimeters are done responsibly.”
A report last month indicated that U.S. regulators were partnering to develop clearer rules, such as letting banks hold crypto assets on their balance sheets and enabling them to facilitate crypto trading for their clients.