Which regulators allowed bank crypto custody?

TLDR

In the United States, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the FDIC have allowed banks to offer crypto custody under supervised rules per recent guidance from the agencies US federal banking regulators.

1. The OCC explicitly affirmed national banks may provide crypto custody (Interpretive Letter 1170) per a recent overview OCC letter 1170.
2. The FDIC rescinded prior pre?approval requirements for bank crypto activities, including custody, if risks are managed FDIC policy change.
3. Hong Kongs SFC and FSTB are moving to license crypto custodians, enabling bank?affiliated custody in a regulated framework Hong Kong licensing.

Deep Dive

1. US Banking Agencies

The OCC, Federal Reserve Board, and FDIC have clarified that banks can engage in crypto?asset activities, including custody, provided they operate in a safe and sound manner and under existing laws US federal banking regulators.

• The FDICs December update removed blanket pre?approval for crypto activities, aligning with the Fed and OCC stance that risk controls must be in place FDIC policy change.
• The Federal Reserve also withdrew a 2023 policy that discouraged novel crypto activities for certain banks, moving toward case?by?case oversight Fed rescission.

2. OCC Custody Clarification

The OCC previously affirmed that national banks may provide cryptocurrency custody services for customers, including safekeeping of cryptographic keys (Interpretive Letter 1170), and has since clarified other routes for bank crypto brokerage and execution OCC letter 1170.

• Recent guidance also confirmed banks can facilitate riskless principal crypto trades (brokering without holding inventory or market risk), tightening operational guardrails while enabling participation OCC brokering framework.

3. Hong Kong Framework

Hong Kong is expanding its digital?asset regime to require licensing for virtual?asset dealers and custodians, closing gaps beyond exchange platforms and formalizing compliant custody offerings Hong Kong licensing.

• Regulators highlight secure private?key handling and client?asset protection; consultative steps aim at a comprehensive, institutional?grade framework by 2026 %%CKPROTECTED0%%.

Conclusion

Banks can offer crypto custody where regulators have clarified supervised pathwaysmost notably via the OCC, Federal Reserve, and FDIC in the USwhile Hong Kong is formalizing licensing for custodians. The common thread is permission with safeguards: risk control, secure key management, and compliance, which could increase institutional participation without relaxing prudential standards.