As had been widely anticipated, on March 7, 2025, the Office of the Comptroller of the Currency (“OCC”) fired the first salvo in what is expected to be a campaign by federal banking agencies to bring the digital asset industry within the bank regulatory perimeter. Specifically, with Interpretive Letter 1183, the OCC: (i) rescinded controversial 2021 guidance from the agency that effectively stopped national banks from engaging in crypto-related activities; and (ii) reaffirmed Interpretive Letters issued near the end of the first Trump administration that found various activities involving digital assets to be permissible for OCC-regulated banks. The OCC also withdrew its participation in interagency guidance on “crypto-asset risks to banking organizations” and liquidity risks resulting from “crypto-asset market vulnerabilities” (together the “Joint Statements on Crypto Risks”).
In this post, the third in our series on digital asset regulation during the second Trump administration,[1] we summarize the OCC’s recent actions and discuss the implications not only for national banks and federal savings associations (“FSAs”), but also for the banking and digital asset industries more broadly.
Evolving Views on the Permissibility of Crypto-Related Activities
Almost since digital assets and cryptocurrencies began to emerge as financial instruments more than a decade ago, there has been ongoing debate about how (if at all) they fit within the federal bank regulatory framework. Clarity seemed to be emerging when, during the final months of the first Trump administration, a series of OCC interpretive letters charted a path for national banks and FSAs to engage directly in certain crypto-related activities, subject to the usual condition that such activities be conducted in a safe and sound manner. In particular:
- Interpretive Letter 1170 (July 22, 2020) concluded that OCC-regulated institutions are permitted to offer cryptocurrency custody services to customers, finding that this was an extension of the financial intermediation function banks and FSAs have traditionally played.
- Interpretive Letter 1172 (September 21, 2020) explained that banks and FSAs may hold stablecoin reserves as a service to bank customers as part of the “core banking activity” of receiving deposits. A stablecoin is a digital asset whose value may be backed by an asset such as the U.S. dollar.
- Interpretive Letter 1174 (January 4, 2021) addressed the permissibility of banks and FSAs to deploy digital assets in performing functions such as payment activities, “consistent with the primary role of banks as financial intermediaries.” According to the agency, leveraging blockchain applications to facilitate payments activities must be allowed because banks have long been permitted to adopt new technologies to perform permissible activities.
The tone toward crypto-related activities, however, took a dramatic shift during the Biden administration. On November 18, 2021, the OCC published Interpretive Letter 1179, which clarified that the activities addressed in Interpretive Letters 1170, 1172, and 1174 were permissible but only if a bank or FSA received a letter of non-objection from its supervisory office after satisfying itself that the activity could be conducted in compliance with “all applicable laws” and under a “compliance management system … sufficient and appropriate to ensure compliance.” Shortly thereafter, the Federal Reserve Board (“FRB”) and Federal Deposit Insurance Corporation (“FDIC”) imposed similar supervisory non-objection requirements on banks within their jurisdiction, and the federal banking agencies came together to issue the Joint Statements on Crypto Risks.
Although Interpretive Letter 1179 claimed merely to “clarif[y] that the activities addressed in [the 2020 and 2021 guidance] are legally permissible” when conducted in a safe and sound manner—which also was the official position of the FRB and FDIC—the procedural hurdles it placed on such activities made them almost impossible for banks to satisfy. Especially in the wake of the Joint Statements on Crypto Risks, very few banks in the United States remained willing to engage in crypto-related activities. Indeed, recently-released documents from the FDIC suggest that, in the words of Acting Chairman Travis Hill, “requests from these banks were almost universally met with resistance” and supervisors “sent the message to banks that it would be extraordinarily difficult—if not impossible—to move forward. As a result, the vast majority of banks simply stopped trying.”
With President Trump back in office for a second term, the pendulum is clearly swinging back. Pro-crypto nominees have been advanced for leadership positions across the financial regulatory agencies and, on March 7, 2025, the President said at the first-ever White House Digital Assets Summit: “My administration … is working to end the federal bureaucracy’s war on crypto.” Treasury Secretary Scott Bessent echoed the sentiment, telling the audience that “[w]e are going to end the regulatory weaponization against digital assets. … We are going to work with the Comptroller of the Currency … and we are going to rescind and amend all applicable previous guidance.”
Implications of Interpretive Letter 1183
Published on the heels of the White House Digital Assets Summit, Interpretive Letter 1183 rescinds Interpretive Letter 1179 and, therefore, relieves OCC-regulated banks of the requirement to seek supervisory non-objection before conducting crypto-related activities.[2] Further, it expressly “reaffirms that the crypto-asset custody, distributed ledger, and stablecoin activities discussed in prior letters are permissible.”
Although Interpretive Letter 1183 applies directly to OCC-supervised banks and FSAs, its implications are broader due to state law parity statutes and federal statutes limiting state banks to activities permissible for national banks.
State law parity (or “wild card”) statutes, grant state-chartered banks powers equivalent to those of national banks regulated by the OCC. These laws vary in the degree of discretion left to banks—some, including New York’s, require the state regulator to approve a bank’s request to engage in activities permitted for national banks but not under state law—but they generally operate to level the playing field between state and national banks.
Furthermore, federal law generally authorizes state-chartered banks supervised by the FDIC or FRB to conduct activities permissible for national banks under Section 24 of the Federal Deposit Insurance Act and Section 9(13) of the Federal Reserve Act, respectively. To that end, in response to inquiries regarding crypto-related activities, the FRB published in January 2023 a policy statement interpreting Section 9(13). The agency explained that state member banks must “look to federal statutes, OCC regulations, and OCC interpretations to determine whether an activity is permissible for national banks” and comply with the same terms required of national banks. For example, the policy statement notes that a state bank seeking to issue a stablecoin would “be required to adhere to all the conditions the OCC has placed on national banks.”
Accordingly, by taking a more permissive posture toward crypto-related activities by its banks, the OCC’s action is likely to have implications far beyond its strict jurisdictional authority.
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We anticipate continued developments in this space and will provide further updates as appropriate.
[1] Our first post on the digital assets executive orders and agency leadership can be found here. Our second post on Congressional action and hearings on digital assets can be found here.
[2] At time of publication, supervisory non-objection processes remain in effect at the FRB and FDIC, but the OCC’s action suggests they are likely to be discontinued as well. In public comments at an industry conference on March 10th and 11th, officials from both the FRB and FDIC suggested that those agencies may soon follow the OCC’s lead.
