On July 22, 2020, the Office of the Comptroller of the Currency (OCC) published a letter clarifying the authority of national banks and federal savings associations (FSAs) to provide cryptocurrency custody services for customers.

The letter states that national banks and FSAs may provide cryptocurrency custody services on behalf of customers, including holding unique cryptographic keys associated with cryptocurrency, because providing such services is equivalent to physical safekeeping and is therefore a modern traditional banking activity. The OCC also concluded that "a national bank [or FSA] may provide secure web-based document storage, retrieval[,] and collaboration of documents and files containing personal information or valuable confidential trade or business information because these services are the electronic expression of traditional safekeeping services provided by banks."

The letter also clarifies that national banks and FSAs are permitted to provide permissible banking services to any lawful business as long as they effectively manage the risks and comply with applicable laws.

The letter concludes by suggesting that national banks and FSAs review anti-money laundering (AML) rules and consult with the OCC before engaging in any cryptocurrency activities. The OCC further states that it will review cryptocurrency activities as part of their ordinary supervisory processes.

Relatedly, the OCC is still accepting comments on an advanced notice of proposed rulemaking (ANPR) more broadly related to the digital activities of banks (see Legal Update, OCC Issues Proposed Rules on Bank Activities, Operations, and Digital Activities). Comments on the ANPR are due August 3, 2020.

For more information on regulation of banking and digital activities, see Practice Notes, US Banking Law: Overview, Commercial Banking, and Fintech in the Banking Industry: Legal and Regulatory Issues.