TL;DR
- U.S. banking regulators (FDIC, Federal Reserve, OCC) have withdrawn previous restrictive statements on crypto assets, giving banks more freedom to engage with digital assets without prior approval.
- Banks can now more easily offer crypto services and provide banking to crypto businesses if they maintain proper risk management practices.
- While U.S. regulations are easing and many regions have adopted more supportive positions, institutions with a global presence must still navigate Basel Committee standards.
- Questions remain about whether U.S. banks can hold crypto assets on balance sheets or engage in crypto lending activities, with further clarity expected.
Federal banking regulators in the United States have withdrawn previous joint statements on crypto assets, now granting banks greater freedom to engage with digital assets. The agencies emphasized their intent to promote innovation and keep expectations current with market changes — recognizing the growing role of blockchain as core financial infrastructure. This opens doors for traditional financial institutions (FIs) to enter the digital asset space with fewer regulatory hurdles.
The OCC, FDIC, and the Fed officially remove roadblocks for banks engaging with crypto
On April 24, 2024, the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and Office of the Comptroller of the Currency (OCC), announced the withdrawal of previous statements regarding banks’ engagement with crypto assets and crypto-related activities.
Previously, regulators imposed heavy oversight requirements, particularly targeting the volatile nature of crypto-related deposits with stringent liquidity management mandates. The now withdrawn regulatory statements, issued in 2023, had effectively created a cautionary barrier for banks considering crypto engagement. While stopping short of outright prohibitions, these advisories created strong regulatory caution against banks:
- Operating directly in crypto (issuing/holding digital assets)
- Providing banking services to crypto businesses
- Holding stablecoin reserves
With these statements rescinded, banks now have greater flexibility to engage with crypto markets, provided they maintain sound risk and compliance practices — a move that recognizes crypto’s growing legitimacy and the mounting client demand for digital asset services.
Important regulatory updates for banks: New opportunities emerge
Each regulator has made specific changes that remove previous hurdles for engaging with digital assets:
- OCC: Rescinded Interpretive Letter 1179, and no longer requires national banks to get a formal “non-objection” before dealing with digital assets. Reinstated earlier permissions from Letters 1170, 1172, and 1174 for crypto custody, stablecoins, and blockchain use. Activities like custody services and using distributed ledger technology are now considered permissible, provided they’re conducted safely and legally. Additionally, on May 7, 2025, The OCC published Interpretive Letter 1184 confirming that national banks and federal savings associations can:
- Buy and sell assets held in custody at the customer’s discretion
- Outsource crypto-asset activities (like custody and execution services) to third parties if they follow proper risk management practices
- FDIC: Issued new guidance affirming that FDIC-supervised institutions can engage in permissible crypto-related activities without seeking prior FDIC approval, if they properly manage risks and comply with regulations. In doing so, the FDIC rescinded the prior notification requirement in FIL-16-2022.
- Federal Reserve: Dropped four prior crypto directives, including the joint statements, SR 22-6, and SR 23-8, requiring prior notice for state member banks engaging in crypto activities, and notice and “non-objection” for dollar token activities, respectively. The Fed will now oversee banks’ crypto activities through regular supervisory processes.
What this means for U.S. banks hoping to engage with digital assets
This regulatory shift represents a significant opportunity for banks in the U.S. considering entry into the digital asset space.
Easier market entry: By removing prior notice and approval requirements, regulators have reduced friction for banks wanting to offer crypto services. This enables faster market entry and greater competitiveness.
Expansion of permissible crypto activities: Banks now have clearer latitude to engage in a range of crypto activities that were previously subject to regulatory uncertainty, including custody services, payments, and distributed ledger applications.
Service expansion to crypto clients: FIs can more confidently provide banking services to businesses in the crypto sector, including exchanges and stablecoin issuers, opening new customer segments and revenue opportunities.
Despite these regulatory clarifications, several important questions remain, with further guidance anticipated:
- Whether banks can hold crypto assets on their balance sheets
- If and how banks can engage in crypto lending activities
Risk management remains essential
While easing restrictions, regulators are still emphasizing the importance of proper risk management. Banks must ensure:
- All crypto activities comply with existing laws and regulations (e.g. Bank Secrecy Act, AML/CFT)
- Operational soundness is maintained
- Adequate risk management controls are implemented
International context
While U.S. regulators have historically taken an explicitly cautious stance against banking crypto businesses and offering custody services, many international counterparts have adopted more neutral or even supportive positions in recent years. For instance, in 2023, the Hong Kong Monetary Authority issued guidance encouraging banks to provide banking services to regulated virtual asset service providers. Similarly, central banks in South Africa, Nigeria and the United Arab Emirates have issued guidance for banks to manage financial integrity risks when engaging with the crypto ecosystem. And in the United Arab Emirates, Singapore and Hong Kong, regulators have signaled a willingness to permit banks to issue stablecoins, reflecting a broader openness to responsible innovation in the financial sector.
However, banks with an international presence may still face some constraints from forthcoming global standards. The Basel Committee on Banking Supervision (BCBS) has expressed continuing concerns about heightened risks associated with permissionless blockchains. As part of this, Basel standards on the prudential treatment of banks’ crypto-asset exposures — which BCBS members have agreed to implement by January 1, 2026 — will impose substantial capital requirements on internationally active banks holding assets on permissionless blockchains on their balance sheets.
Although these standards are primarily intended for banks with an international presence, in practice, many jurisdictions extend their application to large or systemically important domestic banks as well. It is also important to note that Basel standards are not legally binding — they must be adopted through national regulation and this process can involve delays, modifications, or only partial implementation. When fully implemented, these capital requirements can make it prohibitively costly for banks to conduct certain crypto activities at scale, such as lending against crypto collateral and holding stablecoins.
How banks can forge a compliant digital assets strategy
Banks interested in digital asset services should make the most of the new regulatory climate to develop a structured and scalable approach to crypto adoption. With barriers to entry now significantly reduced, institutions have a clearer path to build and expand digital asset offerings.
Success will depend on thoughtful execution, strong partnerships, and robust compliance:
- Evaluate strategic opportunities in the crypto space now that regulatory barriers have been reduced, exploring services like custody, payments, tokenization, and blockchain infrastructure
- Develop comprehensive risk management and compliance frameworks tailored to the unique characteristics of digital assets, including transaction monitoring, customer due diligence, and AML compliance.
- Consider partnerships with trusted crypto service providers. Chainalysis provides best-in-class blockchain intelligence solutions that enable FIs to engage with digital assets confidently and compliantly. Our platform offers real-time transaction monitoring, risk-based entity assessments, and powerful visualizations to help identify and mitigate crypto-related risks — meeting the highest regulatory standards. From onboarding crypto clients and screening transactions to detecting financial crime, Chainalysis equips institutions with the tools and insights needed to operate securely in the digital assets space. Trusted by major banks, regulators, and government agencies worldwide, we integrate advanced blockchain analytics, expert training, and bespoke advisory to help FIs scale crypto programs safely and strategically.
- Monitor for forthcoming agency guidance on more complex issues like cryptocurrency lending and holding digital assets beyond stablecoins on balance sheets
- Consider adopting a phased strategy, using the Crypto Maturity Journey, our five stage framework that helps banks enter and expand within the crypto space.
Download the full guide to learn more about the Crypto Maturity Journey, with examples of how different financial institutions have launched cryptocurrency products at each stage.
Looking towards a blockchain-enabled future
This regulatory shift represents a transformative moment in the U.S. banking landscape. After years of caution and restrictions, regulators are now giving banks more freedom to explore cryptocurrency opportunities with the expectation of responsible innovation.
The door to digital assets is now opening wider, with fewer regulatory obstacles standing in the way of innovation. With partners like Chinalysis, banks can move forward with confidence: strategically, securely, and compliantly.
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