Banks In Crypto: The OCC’s Quiet Game-Changer

Rodney E. Hood, Acting Comptroller of the Currency
Buried in a footnote of a nearly five-year-old regulatory letter, IL 1170, the national banking regulator, the Office of the Comptroller of the Currency (OCC), opened the door for national banks to participate in the cryptocurrency marketplace.
The potential to modernize the financial services system and to provide a safe environment for customers to transact in cryptocurrency was never realized because the banking regulatory agencies under the Biden administration, while never retracting the letter, essentially refused to acknowledge the existence and validity of that official publication, IL 1170.
Fast forward to March 7, 2025, and the OCC’s new publication, Interpretive Letter 1183, (IL 1183) provided the clarity that the banking industry has long deserved. The OCC policy is finally clear that national banks can provide cryptocurrency related services as long as the banks do so in a safe and sound manner.
Prior to engaging an any new activity, banks have to prove to their regulator that the activity is allowed, “permissible” in regulatory-speak. Throughout the last four years banks, and those who sought to acquire a bank, tried to use the earlier guidance as a definitive reference source on whether certain cryptocurrency related activities were permitted to be conducted by the bank. When banks attempted to reference that early regulatory letter, IL 1170, they were essentially told by the regulators, “not enough, what else do you have?”
Put another way, for whatever reason, the banking regulators elected to selectively acknowledge official guidance and banks were told not to rely upon official publications that were no longer in favor politically… but never withdrawn.