The OCC, FDIC, and Federal Reserve, in a rare moment of unity, released a joint statement today, officially granting banks the permission to custody clientsā crypto. This has been a long time coming, with several regulators attempting to implement this policy independently, but today, the rule is as clear as a Moscow morning after a night of vodka.
However, the regulators, ever the cautious guardians of consumer protection, have attached a few caveats. Most notably, banks are strictly forbidden from allowing their clients to hold the keys to these custody mechanisms. One can almost hear the collective groan from the crypto community, who value their self-custody as much as a cat values its independence. š±
Crypto Enters a New Era in US Banking
The federal regulatory apparatus has been swept by a wave of pro-crypto sentiment, bringing about a series of changes that could redefine the landscape. Yet, as with any bureaucratic endeavor, confusion and delays are inevitable, and sometimes, even the most well-intentioned agencies lose their battles. Today, however, three federal financial regulators have joined forces to release a statement, confirming that banks can indeed custody crypto:
NEW: The ābig threeā banking regulators ā @USOCC, @federalreserve & @FDICgov ā just issued joint guidance on how banks should approach custodying crypto assets.
The guidance doesnāt create new rules, but reaffirms that banks must apply existing risk management, legal, andā¦
ā Eleanor Terrett (@EleanorTerrett) July 14, 2025
These three agencies, the OCC, FDIC, and Federal Reserve, have each made several moves to clarify banksā relationship with crypto in recent months. The OCC, for instance, attempted to confirm these custody rules in May, while the FDIC exposed documents related to crypto debanking, changing rules to prevent future abuses. Even the Federal Reserve, which has had its fair share of clashes with the Trump administration, has worked to bridge the gap between banks and crypto by removing guidelines that discouraged traditional financial institutions from engaging with the industry.
In short, many of the biggest regulators are on board with this rule change. The SEC, though not a signatory to todayās statement, approved similar language in January. Today, however, these three agencies came together to make their positions even more explicit:
āBanking organizations may provide safekeeping for cryptoassets in a fiduciary or a non-fiduciary capacity. A banking organizationā¦ has the authority to manage [cryptoassets] in the same way banking organizations manage other assets they hold as fiduciaries,ā the agenciesā statement reads.
So, what does this actually mean? In essence, these regulators are doing everything in their power to reassure banks that they can freely engage with crypto custody. The statement provides a few general guidelines to ensure maximum consumer protection, such as conducting audits, maintaining regulatory compliance, and deploying proper cybersecurity. But letās be honest, who doesnāt love a good audit? š
However, the agencies were firm on one point that may frustrate some community members. If a bank custodies your crypto, itās the primary custodian. When these institutions hold assets, they bear all the liability. In other words, a bank cannot allow a client to directly access their own accountās private keys under any circumstances. Itās like being told you can have a cookie, but only if you let someone else keep the jar. šŖ
Still, this is a small workaround. Many crypto enthusiasts are particularly determined to maintain self-custody over their assets, but these people might not give their tokens to a bank in the first place. Most customers will simply regain their assets as soon as the bank processes the transfer request. That is to say, these regulators arenāt completely taking a laissez-faire approach. Their statement repeatedly emphasized banksā need to maintain compliance and security, even imposing new rules. The federal government is willing to experiment with bank-custody crypto but maintains rigorous standards. š”ļø
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2025-07-15 00:51