Chainalysis: U.S. regulators are giving the green light for banks' digital asset activities.

Source: Chainalysis; Compiled by Wuzhu, Golden Finance

Summary

• U.S. banking regulators (Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC)) have rescinded previous restrictive statements regarding crypto assets, granting banks more freedom to engage in the digital asset space without prior approval.
• If banks can maintain proper risk management measures, they can more easily provide crypto services and offer banking services to crypto businesses.
• Although U.S. regulations are loosening and many regions are taking a more supportive stance, globally influential institutions still must comply with the standards set by the Basel Committee.
• There are still questions about whether American banks can hold crypto assets on their balance sheets or engage in crypto lending activities, and further clarification is expected in the future.

The U.S. Federal Bank regulatory agencies have withdrawn their previous joint statement on crypto assets, granting banks greater freedom to participate in digital asset businesses. These agencies emphasize their commitment to fostering innovation and keeping expectations in line with market changes—they recognize the growing role of blockchain as a core financial infrastructure. This opens the door for traditional financial institutions (FI), allowing them to enter the digital asset space with fewer regulatory barriers.

The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve have officially removed barriers for banks to participate in cryptocurrency.

On April 24, 2024, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency (OCC) announced the withdrawal of their previous statements regarding banks' involvement with cryptocurrency assets and related activities.

Previously, regulators imposed strict regulatory requirements, particularly regarding the volatility of cryptocurrency-related deposits, and established stringent liquidity management regulations. The retracted regulatory statement issued in 2023 effectively set warning barriers for banks considering participating in cryptocurrencies. Although these recommendations did not constitute a complete ban, they presented a strong regulatory warning to banks:

• Operate directly with cryptocurrency (issue/hold digital assets)
• Provide banking services for cryptocurrency enterprises
• Holding stablecoin reserves

With the withdrawal of these statements, banks can now participate more flexibly in the cryptocurrency market, as long as they maintain good risk and compliance practices—this move acknowledges the growing legitimacy of cryptocurrencies and the increasing demand from clients for digital asset services.

Important Update on Banking Regulation: New Opportunities Emerge

Regulatory agencies have made specific adjustments, eliminating the obstacles for banks to participate in digital asset businesses.

• The Office of the Comptroller of the Currency (OCC): has rescinded Interpretive Letter No. 1179, no longer requiring national banks to obtain a formal "no objection" document before engaging in digital asset transactions. It has reinstated the previous permissions regarding cryptocurrency custody, stablecoins, and the use of blockchain as stated in Letters No. 1170, 1172, and 1174. Custody services and activities utilizing distributed ledger technology are now considered permissible, provided that these activities are conducted safely and legally. Additionally, the Office of the Comptroller of the Currency issued Interpretive Letter No. 1184 on May 7, 2025, confirming that national banks and federal savings associations may:
• Buy and sell custodial assets according to the client's wishes.
• Outsource crypto asset activities (such as custodial and execution services) to third parties, provided that the third party follows appropriate risk management practices.
• Federal Deposit Insurance Corporation (FDIC): Issues new guidance confirming that institutions regulated by the FDIC can engage in permitted cryptocurrency-related activities without prior FDIC approval, provided they manage risks properly and comply with regulations. Meanwhile, the FDIC has rescinded the prior notification requirement in FIL-16-2022.
• Federal Reserve: Rescinded four previous cryptocurrency directives, including the joint statement, SR 22-6, and SR 23-8, which required state member banks participating in cryptocurrency activities to provide prior notice, as well as notifications for dollar token activities and "no objection" statements. The Federal Reserve will now oversee banks' cryptocurrency activities through regular regulatory procedures.

What does this mean for American banks looking to enter the digital asset space?

This regulatory shift presents a significant opportunity for U.S. banks considering entering the digital asset space.

Simplified market access: By eliminating prior notification and approval requirements, regulators have reduced the barriers for banks to offer cryptocurrency services, thereby accelerating market access and enhancing competitiveness.

Expand the scope of permitted cryptocurrency business: Banks now have clearer autonomy to engage in a range of cryptocurrency activities that were previously affected by regulatory uncertainty, including custody services, payments, and distributed ledger applications.

Expand services to crypto clients: Financial institutions can more confidently provide banking services to businesses in the crypto space, including exchanges and stablecoin issuers, thereby opening up new customer segments and revenue opportunities.

Despite clear regulations from the authorities, there are still some important issues, and further guidance is expected to be issued:

• Can banks hold cryptocurrency assets on their balance sheets?
• Can and how can banks participate in cryptocurrency lending activities?

Risk management remains important

Despite the easing of regulations, regulators still emphasize the importance of proper risk management. Banks must ensure:

• All cryptocurrency activities comply with current laws and regulations (e.g., the Bank Secrecy Act, anti-money laundering/anti-terrorist financing laws).
• Stable operations, secure operations.
• Implement comprehensive risk management controls.

International Background

Despite the historically cautious stance of U.S. regulators towards banks' cryptocurrency activities and custodial services, many international counterparts have adopted a more neutral or even supportive position in recent years. For example, in 2023, the Hong Kong Monetary Authority issued guidelines encouraging banks to provide banking services to regulated virtual asset service providers. Similarly, the central banks of South Africa, Nigeria, and the UAE have also released guidance on managing financial integrity risks when banks engage in the cryptocurrency ecosystem. Regulators in the UAE, Singapore, and Hong Kong have expressed willingness to allow banks to issue stablecoins, reflecting a broader openness to responsible innovation in the financial sector.

However, internationally influential banks may still face some limitations from the upcoming global standards. The Basel Committee on Banking Supervision (BCBS) has expressed concerns about the increasing risks associated with unlicensed blockchain. As part of this, the Basel guidelines on the prudential treatment of banks' crypto asset risk exposures—which members of the Basel Committee have agreed to implement by January 1, 2026—will impose strict capital requirements on internationally active banks holding unlicensed blockchain assets on their balance sheets.

Although these standards are primarily aimed at internationally influential banks, in practice, many jurisdictions have also expanded their application to large or systemically important domestic banks. It is also worth noting that the Basel standards are not legally binding—they must be adopted through national regulation, a process that may involve delays, modifications, or partial implementation. Once fully implemented, these capital requirements may make the costs of banks engaging in certain crypto activities, such as lending with crypto collateral and holding stablecoins, prohibitively high.

How Banks Can Build a Compliant Digital Asset Strategy

Banks intending to develop digital asset services should fully leverage the new regulatory environment to create structured and scalable cryptocurrency application solutions. With the significant reduction in entry barriers, financial institutions have a clearer path to building and expanding digital asset products.

Success depends on meticulous execution, strong partnerships, and strict compliance:

• In light of the reduced regulatory barriers, assess strategic opportunities in the cryptocurrency sector, exploring services such as custody, payment, tokenization, and blockchain infrastructure.
• Establish a comprehensive risk management and compliance framework based on the unique characteristics of digital assets, including transaction monitoring, customer due diligence, and anti-money laundering compliance.
• Consider partnering with a reputable cryptocurrency service provider.
• Closely monitor the upcoming institutional guidelines to address more complex issues, such as cryptocurrency lending and holding digital assets other than stablecoins on the balance sheet.
• Consider adopting a phased strategy using our five-stage framework "Cryptocurrency Maturity Journey" to help banks enter and develop in the cryptocurrency space.

Looking Ahead to a Future Empowered by Blockchain

This regulatory shift represents a transformative moment for the landscape of the U.S. banking industry. After years of caution and restrictions, regulators are now granting banks more freedom to explore opportunities in cryptocurrency, hoping for responsible innovation.

The door to digital assets is now wide open, and the regulatory barriers hindering innovation are becoming fewer.