US Regulator Rescinds Biden’s Blocks, Says Banks Can Engage In Some Crypto Activities

Authored by Zachary Stieber via The Epoch Times,

A U.S. regulator said on March 7 that banks can engage in some activities related to cryptocurrencies.

The Office of the Comptroller of the Currency (OCC) clarified in a statement that the permitted activities include keeping hold of crypto assets and maintaining reserves for stablecoins, a class of crypto that features prices tied to other assets.

The OCC said it was rescinding a 2021 policy that set limits on when banks could hold crypto, including the requirement that banks must show they have controls in place to ensure they conduct the activity in a “safe and sound manner.”

“The OCC expects banks to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones,” Acting Comptroller of the Currency Rodney E. Hood said in a statement. 

“Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”

The OCC previously issued a series of letters outlining its stance on crypto-related services.

In July 2020, the office said that banks could provide banking services to any lawful business, including crypto firms. In October 2020, the office said that banks can hold reserves from stablecoin issuers. In January 2021, the office said that banks could utilize technologies such as stablecoins to perform permitted functions, such as payment activities.

Later in 2021, though, the OCC said that banks could not engage in crypto-related activities until they notified its supervisory office that it intended to engage in the activities and had received approval from supervisors. The OCC also said that supervisors, before issuing approval, had to evaluate the bank’s systems and make sure the bank could safely engage in such activities.

That’s the position that the OCC has now reversed.

The OCC also said it was withdrawing from joint statements issued on crypto risks to banks, including a 2023 statement with the Federal Reserve and the Federal Deposit Insurance Corporation that said volatility in the crypto space meant there were key risks associated with the sector.

Crypto, including bitcoin, can serve as digital investments and payment methods. Bitcoin, with a limited supply of 21 million coins, also functions as a store of value similar to gold.

President Donald Trump has championed crypto and recently signed an order establishing a bitcoin reserve. The president told reporters that the foundation of the reserve will be the bitcoin seized from criminals.