What the OCC’s tone shift means for banks adopting crypto

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Right before the weekend kicked off — and in the middle of the White House Crypto Summit — the Office of the Comptroller of the Currency clarified that, actually, banks could engage in some crypto activities. 

What’s more, they don’t necessarily need to seek the okay from regulators before hopping into crypto. 

It’s a big deal, but one that got lost in the sauce because we were a bit preoccupied with the executive order on the strategic bitcoin reserve and stockpile. Essentially, this was the first step that banks were waiting for. 

Pillsbury partner Brian Montgomery told me his clients — which include banks, financial institutions and the like — are excited. He spoke to me from a banking conference where OCC’s acting Comptroller Rodney Hood appeared, and Hood sounded “very eager” to open the avenue for banks.

Apparently, Bank of America’s Brian Moynihan isn’t the only one considering a stablecoin either, as quite a few large national banks are mulling the idea, too.  

“Some banks have wanted to be able to provide services in the digital asset space, and haven’t been able to do it. So I don’t know that the tone for banks has changed. I think the tone from regulators has been changing over the last several months,” Montgomery told me.

The thing is that the OCC’s statement only covers national banks. We’d need to see something similar on the federal level from the FDIC and even the Federal Reserve to actually change the stance of regulators, but Montgomery thinks it’s just a matter of time before everyone’s in alignment. 

The timing could be a matter of months — specifically three to four months, though Montgomery was careful to note that the timeline is a bit speculative. 

I should note there are reports floating around that suggest President Trump is mulling an executive order that would roll back some of the anti-crypto banking policies that the former administration put into place. Specifically, the EO would be expected to focus on the Federal Reserve’s policies and could be signed as soon as this week.

Either way, guidance could arrive in the next month or two. If this timeline works out, then it gives banks and regulators a cushion between letting financial institutions explore potential offerings and (hopefully) the passing of stablecoin regulation or other crypto regulation over in DC. 

It’s not just stablecoins the banks are interested in, either. They’re also looking to custody crypto and provide banking services to crypto firms (which is a shift in tone from Operation Chokepoint 2.0). 

“We’ve had to remind folks and think to ourselves that there are still state regulators out there that have a say in a lot of how this works, and so — whether it’s potential money transmission activity or state charter banks providing these services — it’s a positive step that the federal administration and federal regulators are moving in this direction. But that’s not always the end of the game. [We] need to be thinking about state regulation as well,” Montgomery explained.

It’ll be a “hurdle” given that not all state regulators are crypto friendly, but it’s nothing Montgomery is concerned about — just something that he’ll be mulling in further conversations with his clients.

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