Federal Reserve, OCC, FDIC Outline Expectations For Bank Digital Asset Custody

Yesterday the US Federal banking regulators published a statement outlining their expectations for crypto-asset safekeeping by banks. They were keen to emphasize that it doesn’t  “create any new supervisory expectations”, but outlines the risks that banks should take into account. This guidance comes amid broader regulatory shifts since President Trump’s second administration began. The Federal Reserve Board, Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) have published various letters that have rolled back previous restrictions on banks.

It is surprising that it has taken so many years for such a letter, but under the Biden administration the SEC’s SAB 121 effectively prevented banks from providing crypto custody, so any guidance was unnecessary. SAB 121 was rescinded just four days after Trump’s 2025 inauguration. Statistics from the Basel Committee highlighted the nonexistent bank participation in 2023, but by mid 2024 custody had apparently risen to almost $16 billion (€13.57 billion), despite SAB 121.

Staff skills are one of the focuses of the bank regulator statement. “Given the complexities of crypto-asset safekeeping, a banking organization’s board, officers, and employees should have the requisite knowledge and understanding of crypto- asset safekeeping services to establish adequate operational capacity and appropriate controls to conduct the activity in a safe and sound manner and in compliance with applicable laws and regulations,” the statement reads.

It goes on to outline the risk management around cryptographic keys and the legal and compliance risks, especially relating to anti money laundering and the Bank Secrecy Act. Third party risks are more likely with crypto custody. Even if the bank is providing the safekeeping services directly, rather than via a sub custodian, in almost all cases they buy in third party technology. Meanwhile, last week the Senate confirmed Jonathan Gould as the head of the OCC, one of the three regulators responsible for the statement. He spent a stint at crypto firm Bitfury alongside former acting Comptroller Brian Brooks.