The Rise Of Cryptocurrency For Banks

On July 22, 2020, the Office of the Comptroller of the Currency (the OCC) confirmed in Interpretive Letter #1170 the authority of a national bank to provide cryptocurrency custody services. Since that time, the OCC has issued other crypto-friendly guidance, expanding the scope of permissible national bank activities with cryptocurrencies. In January 2021 in Interpretive Letter #1174, the OCC confirmed that a national bank may use new technologies, including independent node verification networks (INVNs) and related stablecoins, to carry out bank-permissible functions, such as payment activities. On April 23, the OCC granted preliminary conditional approval of a limited purpose national trust bank charter for a bank that will provide services only associated with digital assets. The OCC's decisions may lay the groundwork for greater bank engagement in cryptocurrency activities, which have been subject to regulatory uncertainty.