On March 7, the OCC issued its Interpretive Letter 1183, affirming that national banks and federal savings associations can engage in various cryptocurrency activities, including crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks like distributed ledger. The new letter rescinded Interpretive Letter 1179 (covered by InfoBytes here), which permitted banks to engage in those activities but only by securing supervisory non-objection, and set forth the process by which a bank could do so. Prior to Interpretive Letter 1179, the OCC had previously issued three interpretive letters between 2020 and early 2021 — i.e., 1170, 1172 and 1174 — clarifying the permissibility of these activities. Interpretive Letter 1170 addressed crypto-asset custody services; Interpretive Letter 1172 dealt with holding dollar deposits as reserves for stablecoins; and Interpretive Letter 1174 covered acting as nodes on distributed ledgers and engaging in stablecoin activities for payment transactions. The rescission of Interpretive Letter 1179 was intended to reduce the regulatory burden, promote responsible innovation, and enhance transparency, ensuring consistent treatment of bank activities regardless of the technology used. The OCC planned to continue to examine the activities described in the interpretive letters as part of its ongoing supervisory process. Banks engaging in crypto-asset activities must adhere to safe, sound and fair practices and comply with applicable laws. Additionally, any new activities should be developed with robust risk management practices and align with the banks’ overall business strategies.
