Breaking: Fed, FDIC, OCC Finally Clarify Crypto Rules for Banks—What It Means for Your Digital Assets

Regulators just dropped the hammer—or maybe a lifeline—on banks dabbling in crypto. Here's the decoded version.

The Short Version

After years of bureaucratic waffling, the Fed, FDIC, and OCC issued joint guidance letting banks custody crypto—with enough red tape to wrap around the blockchain twice.

What Changed?

Banks can now legally hold crypto keys (with 37 pages of compliance caveats). Stablecoins get a cautious nod, while anything resembling yield farming still sends regulators into cold sweats.

The Fine Print

Expect KYC drills that make Swiss banks blush. Every transaction gets logged like it's 2008 crisis déjà vu—because nothing says 'innovation' like recreating legacy systems with extra steps.

Why It Matters

Mainstream adoption just got a bureaucratic green light. Whether banks will actually move faster than Bitcoin's transaction speeds remains to be seen.

The Bottom Line

Wall Street gets to play with digital assets—provided they maintain enough fiat reserves to bail themselves out when (not if) something goes wrong. Some things never change.

Agencies Explain Rules for Crypto Custody

On Monday, the Federal Reserve, FDIC, and OCC issued a joint statement explaining how banks should apply existing rules when holding crypto for customers. The statement does not introduce new policies but says banks must manage crypto risks like they would with any other service.

The agencies said banks should have clear plans to handle cybersecurity, protect private keys, and keep sensitive data secure. These expectations apply before offering crypto safekeeping services.

Banks Told to Adapt Risk Frameworks

The regulators want banks to adjust their internal controls as the crypto market changes. They wrote: 

“A banking organization that is contemplating providing safekeeping for crypto-assets should consider the evolving nature of the crypto-asset market.”

Banks are expected to maintain risk controls, response plans, and strong oversight. These steps should match the standards already in place for traditional financial products.

In a related development, the U.S. Federal Reserve announced that it is eliminating the use of “reputational risk” as a supervisory factor. This decision could shift how banks approach relationships with crypto businesses.

New Flexibility for Crypto Activities

In recent months, each agency has taken steps to allow more crypto use by banks. In May, the OCC said banks can buy and sell digital assets for their own portfolios. The FDIC followed by stating that banks do not need to notify the agency before starting crypto services.

Meanwhile, these changes make it easier for banks to offer crypto-related products such as trading, custody, and settlement. Industry watchers say the joint statement is a MOVE toward clear and consistent rules.

Last week, the Senate confirmed Jonathan Gould as head of the OCC. Gould worked at blockchain company Bitfury and held senior roles at the OCC in the past. His background suggests more crypto experience at the top of the agency.

Banks and regulators are now expected to work more closely as interest in digital assets continues to grow.