US banks must get authorities approval for sure crypto actions – company insurance
(Reuters) – U.S. banks must obtain written approval from their banking regulators before engaging in certain activities related to cryptocurrencies, a major regulator said Tuesday.
The Office of the Comptroller of the Currency said banks must be able to demonstrate that they have appropriate risk management tools in place before undertaking activities such as providing custody services for customers' crypto holdings.
"Since many of these technologies and products involve novel risks, banks must be able to demonstrate that they have appropriate risk management systems and controls in place to carry them out safely," said acting auditor Michael Hsu in a statement.
The regulator's new stance raises the bar for banks on some crypto activity after the agency, under former President Donald Trump, paved the way for banks to engage in some crypto work.
According to the new interpretative letter, banks are not allowed to carry out various crypto-related activities, such as such activity.
Supervisors will then review the bank's risk management tools and systems and will only permit activity if banks demonstrate that they can do so in a safe and sound manner.
A separate joint statement from the Federal Reserve, Federal Deposit Insurance Corporation and the OCC on Tuesday said that banking regulators intend to clarify what role traditional banks can legally play in the cryptocurrency market in 2022.