OCC Clarifies Bank Authority to Engage in Crypto-Asset Custody and Execution Services
The Office of the Comptroller of the Currency (OCC) has issued Interpretive Letter #1184, confirming that national banks and federal savings associations are allowed to offer and outsource crypto-asset custody and execution services. This guidance offers important clarification about how banks can legally engage in digital asset services while following existing regulations.
Overview of Interpretive Letter #1184
In a response dated May 7, 2025, the OCC confirmed:
Banks may buy and sell crypto-assets that they hold in custody, as long as they are acting on their customers' instructions.
Banks may outsource crypto-related services such as custody and trade execution to outside providers, as long as they manage those relationships responsibly.
This statement helps banks understand how crypto services fit into their traditional roles as custodians and fiduciaries.
Legal and Regulatory Background
Interpretive Letter #1184 builds on two earlier opinions:
Interpretive Letter 1170, which allowed banks to offer crypto-asset custody.
Interpretive Letter 1183, which reaffirmed and expanded that authority.
These letters interpret federal banking laws, including:
12 U.S.C. § 24 (Seventh) – General powers of national banks.
12 U.S.C. § 92a – Fiduciary powers of national banks.
12 U.S.C. § 1464 – Powers of federal savings associations.
The OCC also references a court decision, M & M Leasing Corp. v. Seattle First Nat. Bank, to support the idea that banks can use new methods to perform long-standing services.
What Services Are Permitted?
Banks that offer crypto-asset custody may also provide related services such as:
Exchanging crypto for fiat currency and vice versa;
Processing transactions and trade settlements;
Valuing assets, reporting taxes, and maintaining records.
Interpretive Letter #1184 confirms that buying and selling crypto-assets for customers, when done under proper agreements and legal guidelines, is part of a bank’s permitted custodial duties.
Working with Third-Party Providers
A major clarification is that banks may use third-party providers or sub-custodians to help deliver crypto services. However, they must:
Follow strong risk management policies;
Vet providers carefully and monitor them over time;
Ensure customer assets remain safe and secure.
This gives banks flexibility to work with crypto experts while still meeting regulatory obligations.
Fiduciary Responsibilities and Legal Compliance
When banks act in a fiduciary role, they must follow:
12 C.F.R. Part 9 for national banks;
12 C.F.R. Part 150 for federal savings associations.
They also need to ensure crypto services are delivered in a way that is:
Safe and sound;
Compliant with Anti-Money Laundering (AML) and Know Your Customer (KYC) rules;
Aligned with cybersecurity and privacy standards.
Key Takeaways for Financial Institutions
Interpretive Letter #1184 creates clear opportunities for banks that want to enter the digital asset space. Institutions should consider:
Adding crypto-asset custody to their services;
Partnering with trusted fintech and crypto providers;
Strengthening internal systems to manage risk and compliance.
Legal and risk teams should be involved early to ensure new services align with OCC expectations.
Conclusion
Interpretive Letter #1184 marks an important step in bringing traditional banking into the digital asset economy. The OCC has made it clear that banks may offer and outsource crypto custody and trading services, as long as they do so responsibly and in compliance with federal law.
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If your institution is exploring digital asset custody or needs regulatory guidance on OCC crypto-asset rules, contact our firm at 786.461.1617 to schedule a consultation.
