Following OCC Letter, Some US Banks Appear Open to Providing Crypto Services

Major U.S. banks might be willing to support cryptocurrency services - with just a bit of additional guidance from the Office of the Comptroller of the Currency, their federal regulator.

Notably, several banks, including U.S. Bank and PNC, indicated they might be interested in actually providing crypto custody and other services to customers.

The letter, which opposed a narrow payments charter for fintech companies, was signed by many of the same respondents and sent to the OCC on July 29.Fresh guidance from the OCC may help provide the necessary legal comfort for banks to provide crypto-native analogs to traditional bank services, wrote Juan Saurez, Coinbase's vice president and general counsel for enterprise.

Dominic Venturo, chief digital officer at U.S. Bank National Association, perhaps went the furthest in his response, writing that the OCC and other banking regulators should issue guidance around the cryptocurrency market as well as the "Expectations for services conducted on distributed ledger technology."

PNC Bank's head of technology and innovation, Steven Van Wyk, commented that the OCC should "Continue to reinforce that national banks should take a risk-based approach" in reviewing new products, but should not have risk elimination as the ultimate goal.

Banks can conduct know-your-customer checks and otherwise identify their users to comply with relevant laws before providing privacy services by using mixers or other tools to facilitate crypto transactions.

Banks don't necessarily have to provide crypto services directly.

BitGo, which has offered custody services for over a year, believes that banks should be able to tap sub-custodians to provide these services, Najarian said.

"The OCC permits banks to engage third parties to conduct what they consider to be critical bank activities," he told CoinDesk.

A wide range of industry participants appear to agree: Novi, ConsenSys, Celo, Axos Bank, the American Bankers Association, Figure Technologies, Chamber of Digital Commerce, Silvergate Bank, Ripple Labs and other respondents all supported the idea that banks and savings institutions can safely handle crypto-related services with the right amount of regulation.