U.S. Regulators Allow Banks Crypto Custody

U.S. federal banking regulators, including the OCC, FDIC, and FRB, have issued revised guidance in April 2025, permitting banks to engage in crypto custody and related services.

The revision aims to restore prior flexibility for banks while emphasizing risk management compliance, potentially accelerating institutional interest in crypto services.

The new guidance from the OCC, FDIC, and FRB overturns previous restrictive policies. Banks can now offer crypto custody without prior approval, provided they manage risks and comply with regulations. This marks a return to previous crypto-friendly policies.

The three federal regulators, including the Federal Reserve, have removed prior barriers by revoking restrictive letters. This includes the Federal Reserve monitoring crypto activities through their normal supervisory process rather than through separate procedures.

Banks may experience improved autonomy under these new guidelines, allowing them to engage more vigorously in crypto activities. This newfound capacity to offer a wider range of services could lead to increased institutional investment in digital assets.

The impact on financial markets could be notable, as banks, now able to hold assets like BTC and ETH, can facilitate greater involvement in the crypto economy. Observers anticipate a potential stimulus to market liquidity.

Potential outcomes include heightened institutional engagement in digital currencies. Historical precedents show regulatory relaxation fosters increased market activity. Insights from past shifts support this outcome, as banks broaden offerings and risk management precedents evolve.

“Providing crypto-asset custody services is a modern form of traditional bank custody activities.” — Brian Brooks, Former Acting Comptroller of the Currency