Clifford Chance

In an expected move following the appointment of Rodney E. Hood as Acting Comptroller of the Currency, the Office of the Comptroller of the Currency (OCC) on Friday, March 7, 2025, published Interpretive Letter 1183, which officially rescinds Interpretive Letter 1179 and re-affirms the authority for national banks to engage in the following "crypto-asset activities":

• Safekeeping and custody of cryptocurrency and crypto-assets;
• Holding of deposits as reserves for certain "stablecoins"; and
• Operating nodes on a blockchain ledger and engaging in certain stablecoin activities to facilitate payments.

Although the OCC had clarified in 2020 and 2021 that each of these activities was legally permissible for national banks (See OCC IL1170, OCC IL1172 and OCC IL1174), Interpretive Letter 1179 imposed a significant constraint requiring national banks to notify their OCC supervisors and obtain a supervisory non-objection before engaging in any such activities. This procedural requirement generally does not apply to other bank-permissible activities.

The Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) followed IL 1179 with their own interpretive guidance, SR 22-6 and FIL-16-2022, imposing the same de facto pre-approval requirement.  Coupled with other interagency pronouncements (see here and here), IL 1179 signaled a decisively less accommodating stance by the banking agencies towards banks engaging in crypto-related activities.

Under IL 1179, banks that sought guidance or pre-approval to engage in crypto-related activities sometimes never heard back on their requests or were instructed to suspend any such activities, as evidenced by the FDIC's "crypto pause" letters. In this way, a procedural hurdle that was questionable from the start quickly revealed itself to be a de facto ban.

IL 1183 effectively lifts this ban and signals a much more accommodative, pro-innovation and technology-neutral posture by the OCC towards national banks engaging with the digital asset/fintech sector and offering crypto-related services to customers. The OCC's approach is consistent with recent actions by other financial regulators, such as the Securities and Exchange Commission (SEC) (see e.g., the SEC's issuance of Staff Accounting Bulletin (SAB) 122, rescinding SAB 121 – our briefing specifically highlighted SAB 122's restoration of technology neutrality and the application of traditional GAAP principles for crypto-assets under custody) and the Commodity Futures Trading Commission (CFTC) (see e.g., the CFTC's Global Markets Advisory Committee advancing recommendations that tokenized non-cash collateral be treated the same as any other type of non-cash collateral). Notably, the Fed's Policy Statement on Section 9(13) of the Federal Reserve Act recommends that state member banks look to, among others, OCC regulations and OCC interpretations "to determine whether an activity is permissible for national banks". It will be interesting to see if and how the Fed and the FDIC change their interpretive guidance or enable other developments in this area.

Importantly, IL 1183 is not a blanket authorization. The underlying crypto-asset activity must still be conducted in a "safe, sound, and fair manner" and comply with applicable laws. For example, compliance with sanctions and anti-money laundering requirements are among those restrictions that may continue to pose challenges to banks in this sector. Further, national banks must still determine whether any proposed crypto-related activity outside of the services described above are legally permissible within their general banking powers. Nevertheless, we anticipate that the appetite for national banks and a broader range of players to experiment with, invest in, and grow their crypto-related offerings, including tokenization of financial assets (e.g., securities, structured products, deposits, etc.), crypto-lending and custody, and transaction processing and payments, will expand considerably with this latest guidance.