FDIC & OCC Clear a Path for Bank Crypto Activity
From Caution to Confidence
In a landmark regulatory shift, both the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have opened the door wider for banks to engage in crypto-related activities—without prior supervisory approval. This evolution from cautious oversight to a more supportive stance marks a pivotal moment in the integration of digital assets into the traditional banking ecosystem.
A Regulatory Turning Point
In April 2025, the FDIC issued a revised Financial Institution Letter (FIL-16-2025) clarifying that FDIC-supervised institutions no longer need to notify the agency before engaging in crypto-related activities, provided they are conducted in a safe and sound manner.
Shortly before that, in March 2025, the OCC released Interpretive Letter 1183, which replaced earlier restrictive guidance—namely, Interpretive Letter 1179 (2021). The new directive allows national banks and federal savings associations to engage in a broad range of digital asset activities without prior supervisory non-objection.
This rollback of earlier policies, including previous interagency warnings tied to market volatility and events like the FTX collapse, reflects a growing recognition: digital assets are here to stay, and banks need a pathway to responsibly participate.
“This move reflects an evolving regulatory perspective on how banks can responsibly explore and participate in the digital asset ecosystem.”
What’s Now Permissible?
According to Sullivan & Cromwell’s summary, under the updated guidance, FDIC- and OCC-supervised institutions may engage in a variety of crypto-related functions, including:
- Acting as crypto-asset custodians
- Maintaining stablecoin reserves
- Issuing crypto and digital assets
- Participating in blockchain/DLT-based payment systems
- Acting as market makers, redemption agents, or exchange agents
- Engaging in crypto-related lending or finder activities
However, this regulatory greenlight comes with an important caveat: banks must still uphold rigorous risk management and compliance standards.
The Risks Remain
Even as regulatory barriers fall, crypto remains a fast-moving, high-risk space. Banks must still navigate:
- Market volatility and liquidity risk
- Cybersecurity vulnerabilities
- Anti-Money Laundering (AML) obligations
- Consumer protection requirements
The FDIC’s updated FIL underscores the need for ongoing engagement with supervisory teams and alignment with the agency’s Supervision Manual.
Why Compliance Still Matters
Reduced regulatory friction doesn’t mean reduced responsibility. Banks entering the digital asset space must continue to invest in strong oversight frameworks, especially regarding employee activity—an often-overlooked source of compliance risk.
Key compliance considerations include:
- Monitoring employee crypto trading for conflicts of interest
- Managing pre-clearance processes for personal investments
- Ensuring transparency in crypto-related lending and advising
- Upholding robust AML/KYC programs amid evolving risks
How StarCompliance Can Help
At StarCompliance, we empower banks to innovate responsibly, while maintaining their safety and soundness obligations. Our Crypto Trading Compliance Software is designed to:
- Monitor employee crypto activity in real time
- Flag potential conflicts of interest
- Manage pre-clearance workflows
- Provide audit-ready visibility across your organization
As regulatory expectations evolve, StarCompliance helps institutions stay ahead of emerging risks while maintaining a strong culture of compliance.
Looking Ahead
The FDIC and OCC’s updated stances suggest a broader regulatory push toward harmonization and clarity. Further guidance from the Federal Reserve is likely on the horizon. For now, the message is clear: banks can engage with crypto—but must do so responsibly.
Want to learn more? Let’s talk. Schedule your personalized demo to discover how we can support your digital asset compliance strategy.
Crypto Regulations Decoded
