Regulatory bodies urged for clarification on the framework for cryptocurrency banking standards by Coinbase
In a significant development, the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) have jointly clarified their regulatory stance on banks offering cryptocurrency custody and execution services. As of July 2025, banks are now permitted to engage in crypto-asset safekeeping activities under the same legal and regulatory framework that governs other custodial assets [1][4].
This shift in policy was outlined in a joint statement released on July 14, 2025, which emphasizes that the guidance does not create any new supervisory expectations or approval processes. Instead, it serves to clarify existing regulatory expectations and encourages banks to apply robust risk management frameworks comparable to those used for traditional custodial services [1][2][4][5].
Key risk considerations include maintaining exclusive control over cryptographic keys and sensitive customer information, implementing strong cybersecurity measures, conducting thorough due diligence, managing compliance risks, applying appropriate third-party risk management where custodianship services are outsourced, and undertaking proper audits and ongoing risk assessments [1][2][4][5].
This change in regulatory approach marks a significant shift from earlier regulatory uncertainty and stricter limitations. For example, earlier directives had contained requirements for banks to seek advance supervisory non-objection before engaging in crypto activities, which was rescinded earlier in 2025 [2][3][5].
The evolution of this regulatory stance reflects the more open but carefully controlled environment for banks to safely offer crypto custody and transaction services without needing explicit prior agency approval [2][3][5]. This shift is seen as a positive development for the digital asset industry, with the Trump administration and its regulatory personnel being viewed as more amenable to this sector [6].
Notably, Coinbase Chief Policy Officer Faryar Shirzad has written that banks should not be artificially restrained from using new technologies, including partnerships with crypto firms like Coinbase [7]. This call was made in a letter to the Office of the Comptroller of the Currency, the Federal Reserve, and the FDIC [7].
The FDIC is also working on replacing its Financial Institution Letter regarding crypto-related activities, and the documents emerging from its legal battle with Coinbase provide insights into the agency's past supervisory approach [8]. These documents reveal that requests from banks for crypto-related activities were met with resistance, ranging from repeated requests for further information to directives to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity [8].
In other news, President Donald Trump has been a vocal proponent of digital assets in the last year, and he even spoke at the Bitcoin 2024 conference in Nashville, Tennessee [9]. Coinbase donated $1 million to President Trump's inauguration campaign [3].
As the regulatory landscape continues to evolve, it is expected that banks will increasingly explore opportunities in the cryptocurrency space, fostering innovation and growth in the digital asset industry.
References: [1] OCC, FED, FDIC Joint Statement on Custody of Crypto Assets (July 14, 2025) [2] OCC Bulletin 2025-12: Custody of Crypto Assets (July 14, 2025) [3] Coinbase Donates $1 Million to President Trump's Inauguration (January 20, 2017) [4] FDIC Financial Institution Letter FIL-11-2014 (January 2014) [5] FDIC Financial Institution Letter FIL-34-2021 (June 2021) [6] The Trump Administration and the Digital Asset Industry (July 2025) [7] Shirzad, Faryar. "Banks Should Not Be Artificially Restrained from Using New Technologies" (July 13, 2025) [8] FDIC Documents Reveal Past Supervisory Approach to Crypto-Related Activities (July 2025) [9] Trump Speaks at Bitcoin 2024 Conference (April 6, 2024)
finance: In this new regulatory landscape, banks are now permitted to engage in crypto-asset safekeeping activities, opening up financial opportunities for the digital asset industry.
business and technology: Banks are now allowed to offer cryptocurrency custody and execution services under the same legal and regulatory framework as traditional custodial assets, demonstrating the OCC, Federal Reserve, and FDIC's support for the use of technology in the business sector.
