Chainalysis: US regulators are giving the green light for banks to conduct digital asset activities.

After years of caution and restrictions, regulators are now giving banks more freedom to explore opportunities in Crypto Assets, expecting them to engage in responsible innovation.

Written by: Chainalysis

Compiled by: Wuzhu, Jinse Finance

Summary

U.S. banking regulators (Federal Deposit Insurance Corporation (FDIC), Federal Reserve, Office of the Comptroller of the Currency (OCC)) have rescinded their previous restrictive statements on Crypto Assets, granting banks more freedom to engage in the digital asset space without prior approval.

If banks can maintain appropriate risk management measures, they can more easily provide Crypto Assets services and offer banking services to Crypto enterprises.

Despite the loosening of regulations in the United States and more supportive stances taken by many regions, globally influential institutions must still 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The U.S. federal banking regulators have withdrawn their previous joint statement regarding Crypto Assets, granting banks greater freedom to engage in digital asset business. These agencies emphasize their commitment to fostering innovation and keeping expectations aligned 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 hurdles.

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 Crypto Assets.

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 retraction of a previous statement about banks' involvement in cryptocurrency assets and related activities.

Previously, regulatory authorities imposed strict regulatory requirements, especially regarding the volatility of deposits related to Crypto Assets, and established stringent liquidity management regulations. The regulatory statement issued in 2023, which has now been withdrawn, effectively set up warning barriers for banks considering participation in Crypto Assets. Although these recommendations did not constitute a complete ban, they presented strong regulatory warnings to banks:

• Operate directly with Crypto Assets (issue / hold digital assets)
• Provide banking services for Crypto Assets enterprises
• Hold stablecoin reserves

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

Important Update on Bank Regulation: New Opportunities Emerge

All regulatory agencies have made specific adjustments to eliminate the barriers for banks to participate in digital asset business:

• The Office of the Comptroller of the Currency (OCC): revoked Interpretive Letter No. 1179, no longer requiring national banks to obtain a formal "no objection" document before engaging in digital asset transactions. Restored previous permissions regarding Crypto Assets custody, stablecoins, and blockchain use from Letters No. 1170, 1172, and 1174. Custodial services and activities using distributed ledger technology are now considered permissible, provided these activities are conducted safely and legally. Furthermore, 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 custody assets according to the client's wishes
• Outsource Crypto Assets activities (such as custodial and execution services) to third parties, provided that the third parties adhere to appropriate risk management practices.
• Federal Deposit Insurance Corporation (FDIC): issued new guidelines confirming that institutions regulated by the FDIC may engage in permitted Crypto Assets-related activities without prior FDIC approval, provided they are managing risks appropriately and complying with regulations. Meanwhile, the FDIC has rescinded the prior notification requirement in FIL-16-2022.
• Federal Reserve: Has rescinded the previous four Crypto Assets directives, including the joint statement, SR 22-6, and SR 23-8, which respectively required state member banks participating in Crypto Assets activities to provide advance notice, as well as notifications for dollar token activities and "no objection" statements. The Federal Reserve will now supervise banks' Crypto Assets activities through regular regulatory processes.

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

This regulatory shift represents 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 resistance for banks to provide crypto assets services, thereby accelerating market access and enhancing competitiveness.

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

Expand services for Crypto Assets clients: Financial institutions can more confidently provide banking services to businesses in the encryption field (including exchanges and stablecoin issuers), thereby opening up new customer groups and revenue opportunities.

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

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

Risk management remains important

Despite the relaxation of regulations, regulatory authorities continue to emphasize the importance of proper risk management. Banks must ensure:

• All Crypto Assets activities comply with current laws and regulations (e.g., the Bank Secrecy Act, anti-money laundering / anti-terrorism financing laws).
• Operations are stable and secure.
• Implement comprehensive risk management controls.

International Background

While U.S. regulators have historically been clearly cautious about banks' cryptocurrency operations and the provision of custodian services, many international counterparts have taken a more neutral or even supportive stance in recent years. For instance, in 2023, the Hong Kong Monetary Authority (HKMA) issued guidelines to encourage banks to provide banking services to regulated virtual asset service providers. Similarly, the central banks of South Africa, Nigeria, and the UAE have issued guidance to guide banks in managing financial integrity risks when participating in the cryptocurrency ecosystem. Regulators in the UAE, Singapore and Hong Kong have expressed their willingness to allow banks to issue stablecoins, reflecting their 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 prudent handling of banks' crypto assets 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 mainly aimed at internationally influential banks, in practice, many jurisdictions also extend their applicability 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 Assets activities prohibitively high, such as lending with crypto collateral and holding stablecoins.

How Banks Build Compliant Digital Asset Strategies

Banks intending to develop services for digital assets should fully leverage the new regulatory environment to formulate structured and scalable Crypto Assets application solutions. With the significant reduction of entry barriers, financial institutions have a clearer path for 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 Crypto Assets space and explore services such as custody, payments, tokenization, and blockchain infrastructure.
• Develop 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 trustworthy Crypto Assets service provider.
• Pay close attention to the upcoming institutional guidelines to address more complex issues, such as Crypto Assets lending and holding digital assets other than stablecoins on the balance sheet.
• Consider adopting a phased strategy, using our five-phase framework "Crypto Assets Maturity Journey" to help banks enter and develop in the crypto assets field.

Looking Ahead to a Future Empowered by Blockchain

This regulatory shift represents a transformative moment for the landscape of the American banking industry. After years of caution and restrictions, regulators are now granting banks more freedom to explore opportunities in Crypto Assets, with the expectation that they will engage in responsible innovation.

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