US Banks Granted Authority to Manage Cryptocurrency for Customers

US banks can now manage cryptocurrencies on behalf of clients under new OCC guidance, allowing them to buy, sell, and hold crypto. They can also outsource custody services. This reflects a shift toward merging crypto with traditional banking, with industry experts welcoming this regulatory change.

In a significant move for the financial sector, US banks have now been green-lighted to manage cryptocurrency assets on behalf of their clients. The Office of the Comptroller of the Currency (OCC) has issued updated guidance, confirming that banks can purchase, sell, and hold crypto for customers, possibly opening the floodgates to broader participation in the cryptocurrency market.

The new rules permit banks to outsource certain services related to cryptocurrency, including custody and transaction execution, to third parties. Acting Comptroller Rodney Hood explained that this also includes the capability for banks to offer essential services like tax reporting, record-keeping, and sub-custody support. However, these services need to adhere to established legal and risk management protocols, ensuring accountability within the industry.

This decision illustrates a noticeable shift towards blending cryptocurrency into conventional banking, especially given that more than 50 million Americans reportedly own digital assets. The move has garnered positive reactions from various experts in the field, indicating a progressive tilt in US financial regulations concerning cryptocurrency.

Katherine Kirkpatrick Bos, a representative from StarkWare, remarked that this represents a meaningful change in the OCC’s approach to cryptocurrency. Meanwhile, Faryar Shirzad from Coinbase noted the importance of this updated guidance in providing much-needed regulatory certainty for financial institutions contemplating crypto-related services.

The timing of the OCC’s announcement intersects with a broader trend seen during the Trump administration, which notably embraced a more sympathetic stance towards cryptocurrency operations within banks. This backdrop further illustrates the evolving regulatory landscape surrounding digital assets in the United States.

As banks begin to adapt to these new opportunities, questions remain about how customers will engage with these services and how banks will integrate crypto into their existing financial products. Overall, this new policy could pave the way for enhanced participation in the cryptocurrency sector, significantly impacting how Americans manage and utilise their digital assets.