American national banks have recently gained the legal authority to engage in the buying and selling of cryptocurrencies for their clients. This change came about through an updated interpretive letter issued by the Office of the Comptroller of the Currency (OCC) on Wednesday, which removes earlier regulatory obstacles for banks providing digital asset services.

Comprehensive Crypto Services Allowed for Banks

Following OCC’s new guidance, national banks and federal savings associations are now permitted to offer a wide range of cryptocurrency services. This includes the buying and selling of digital currencies, converting them into US dollars, settling transactions, keeping customer records, and aiding in asset valuations and tax documentation.

These functions can be executed either directly by the banks or in partnership with third-party services. In both scenarios, the OCC stressed that banks must have strong internal controls and risk management practices in place.

This updated guidance reflects a significant shift in the regulatory landscape regarding cryptocurrency in the US. Earlier, on March 7, the OCC abolished a rule requiring banks to seek supervisory approval before delving into digital currency transactions.

Subsequently, on April 24, the Federal Reserve reversed its 2022 policy that mandated state member banks to notify authorities ahead of engaging in crypto activities. Faryar Shirzad, Chief Policy Officer at Coinbase, indicated that this new approach brings clarity and acknowledged Acting Comptroller Rodney Hood for facilitating this progress.

Huge thanks to Acting @USOCC Comptroller Rodney Hood for clarifying that national banks can offer a full range of crypto services. We value Comptroller Hood’s dedication to regulatory clarity and commitment to supervisory best practices… pic.twitter.com/i1MyKc4T1I

— Faryar Shirzad (@faryarshirzad) May 7, 2025

Bank Actions Based on Customer Instructions

The OCC’s letter clarifies that banks can act according to customer instructions. This means if a client wishes to sell their crypto assets held at the bank, the bank can carry out the transaction directly. This boosts customer control and simplifies crypto transactions through familiar banking channels.

This clarity is built on earlier OCC guidance, eliminating previous uncertainties. Banks are no longer required to seek special approvals for these services, likely speeding up adoption.

Risk Management Rules for Third-Party Providers

The OCC also set forth standards for banks working with external crypto service providers. If banks outsource functions like crypto custody or transaction processing, they are required to perform due diligence and implement oversight measures.

Sub-custodians in particular must follow strict security protocols to protect customer assets. The OCC expects banks to hold these partners to the same high standards they apply across the banking sector. Risk management practices need to align with existing regulations to ensure the safety of customer investments.

Integrating Cryptocurrency into Banking

This announcement signifies a pivotal shift, suggesting that cryptocurrencies are becoming accepted in mainstream banking. By giving banks more freedom to operate without prior approval, the OCC is indicating a more welcoming attitude toward digital assets within regulated financial frameworks.

While the extent of banks entering this arena remains uncertain, the guidelines are established, the pathway is clear, and customers can now access crypto services through the banks where they manage their traditional accounts.

Source image from The Information, chart from TradingView