U.S. Banks Must Seek Permission Before Offering Crypto Services to Customers, OCC says

The Office of the Comptroller of the Currency (OCC) on Tuesday released an interpretative letter saying that U.S. banks must first seek permission from their supervisors before offering cryptocurrency services to their clients.

OCC noted that U.S. banks that wish to offer crypto services to their customers must be able to come up with ways in which investors can be protected against the risks involved in investing in digital assets.

“Because many of these technologies and products present novel risks, banks must be able to demonstrate that they have appropriate risk management systems and controls in place to conduct them safely,” acting Comptroller Michael Hsu said.

Furthermore, banks planning to offer services including stablecoins and other digital assets to customers are not permitted to do so without first notifying their supervisors.

Recall that last year, OCC released an interpretative letter under the leadership of crypto enthusiast Brian Brooks, the now-former Acting Comptroller.

The letter, which was released on June 22, 2020, stated that the OCC has permitted all U.S. banks to offer crypto services to their customers “so long as they effectively manage the risks and comply with applicable law.”

The financial regulator noted that the development will enable banks to satisfy the growing customer demand for crypto assets.

“This opinion clarifies that banks can continue satisfying their customers’ needs for safeguarding their most valuable assets, which today for tens of millions of Americans includes cryptocurrency,” OCC said in the letter.

U.S. Mapping Out Regulatory Framework to Accommodate Crypto

To protect crypto investors, U.S. financial watchdogs have been seeking ways to come up with a regulatory framework that can accommodate the emerging asset class.

Just early last month, Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), noted during a conference with members of Congress that the financial watchdog has no plans to ban cryptocurrencies as China did.

Following the statement, Gensler added that the U.S. approach to cryptocurrencies is totally different from that of China.