Breaking: US Regulators Greenlight Banks to Custody Crypto—Wall Street’s New Gold Rush?
US regulators just handed banks the keys to the crypto kingdom—and the industry will never be the same.
The Big Shift
No more regulatory gray area. The Fed, OCC, and FDIC jointly confirmed that federally chartered banks can now legally hold digital assets for clients. Forget "wild west" narratives—this is institutional adoption on steroids.
Why It Matters
Banks no longer need to outsource custody to fintech upstarts. JPMorgan and BofA can finally compete with Coinbase—assuming they don't strangle innovation with 2008-era compliance overhead.
The Cynic's Take
Watch traditional finance 'discover' crypto custody fees at 3x what they charge for gold storage. Some things never change.
Crypto Enters a New Era in US Banking
Sweeping new pro-crypto attitudes have permeated the federal regulatory apparatus, bringing a wide range of changes.
However, lingering confusion can still delay prominent wins, and agencies sometimes lose their battles. Today, three federal financial regulators have united to release a statement, confirming that banks can custody crypto:
NEW: The “big three” banking regulators — @USOCC, @federalreserve & @FDICgov — just issued joint guidance on how banks should approach custodying crypto assets.
The guidance doesn’t create new rules, but reaffirms that banks must apply existing risk management, legal, and… pic.twitter.com/HW3AEIaVeT
These three agencies, the OCC, FDIC, and Federal Reserve, have each made several moves to clarify banks’ relationship to crypto in recent months.
The OCC, for example, attempted to explicitly confirm these custody rules in May. Before this, the FDIC exposed documents related to crypto debanking, changing rules to prevent future abuses.
Even the Federal Reserve, which has recently clashed with Trump, has also worked to bridge the gap between banks and crypto. It removed reputational risk guidelines that strongly discouraged TradFi institutions away from the industry.
In short, many of the biggest regulators all want this rule change. The SEC, which did not sign today’s statement, also approved similar language in January. Today, however, these three agencies came together to make their positions even more explicit:
“Banking organizations may provide safekeeping for cryptoassets in a fiduciary or a non-fiduciary capacity. A banking organization… has the authority to manage [cryptoassets] in the same way banking organizations manage other assets they hold as fiduciaries,” the agencies’ statement reads.
So, what does this actually mean? Simply put, these regulators are doing everything 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, deploying proper cybersecurity, etc.
However, these agencies were firm on one point that may frustrate some community members. If a bank custodies your crypto, it’s 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 account’s private keys under any circumstances.
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 aren’t completely taking a laissez-faire approach. Their statement repeatedly emphasized banks’ 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.
