OCC Clarifies Permitted Banking Cryptocurrency Activities – Finance and Banking

OCC Clarifies Permitted Banking Cryptocurrency Activities - Finance and Banking

Cadwalader, Wickersham & Taft LLP

26 November 2021


  • In Interpretive Letter 1179, the OCC clarified the authority of (i) banks to
    engage in cryptocurrency activities and (ii) the OCC to charter
    national trust banks.

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The OCC also reiterated its clarification in Interpretive
Letter 1176 that (i) the OCC has the authority to
charter a national bank that operates only as a trust company, and
(ii) the OCC’s chartering authority does not expand or modify
banks’ current responsibilities under Part 9 (“Fiduciary Activities of
National Banks”) of the OCC Rules. With respect to assessing
whether an entity’s activities are limited to the operations of
a trust company, the OCC asserted that it retains the authority to
assess “whether an activity is conducted in a fiduciary
capacity for purposes of federal law.”

The OCC stated that a bank can engage in the activities outlined
in Interpretive Letters 1170, 1172 and 1174,
which pertain to (i) cryptocurrency custody services, (ii) whether
banks may hold deposits to serve as “reserves backing
stablecoin,” and (iii) banks’ engagement with distributed
ledger technology for payment services, respectively. The OCC
clarified that in order for a bank to engage in such activities, it
must demonstrate that it has “controls in place to conduct the
activity in a safe and sound manner.” The OCC specified that
banks intending to engage in such activities must first notify
their supervisory office and receive permission. Supervisory
offices must assess whether a bank’s risk management systems
and controls are sufficient for engagement in such activities.

Primary Sources

OCC Press Release: OCC Clarifies Bank Authority to
Engage in Certain Cryptocurrency Activities and Authority of OCC to
Charter National Trust Banks

OCC Interpretive Letter 1179

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