Emma Nelson 
OCC Grants Federal Banks Permission to Engage in Crypto Activities. The Office of the Comptroller of the Currency (OCC) has officially clarified that Federal Banks can now participate in specific cryptocurrency activities, marking a major shift in regulatory stance. Industry leaders have hailed this as the biggest crypto-related development of the week, signaling what many consider the official end of the U.S. government’s crackdown on digital assets.
OCC
Federal Banks Gain Approval for Crypto, Stablecoin, and DeFi Participation
On March 7, the OCC published Interpretive Letter 1183, which provides clear guidance on banks’ involvement in crypto custody services. Under this new framework, Federal Banks are authorized to provide custody for digital assets and engage in stablecoin-related activities, reinforcing their role in the evolving payments industry.
Additionally, the OCC has approved Federal Banks’ involvement in certain Decentralized Finance (DeFi) activities, including serving as independent node validators for blockchain networks. This marks a significant step toward integrating traditional banking institutions with blockchain technology.
As part of these new allowances, the OCC has removed the requirement for banks to obtain special licenses before participating in DeFi-related activities. More notably, banks are now permitted to engage in cryptocurrency activities without the prior need to prove that they have adequate risk controls in place.
Furthermore, the OCC has announced a withdrawal from its participation in previous joint statements on crypto-asset risks for banking organizations. This includes guidance on liquidity risks associated with crypto markets, indicating a broader shift toward a more crypto-friendly regulatory environment.
End of Operation Chokepoint 2.0 and a New Era for Crypto Regulation
Unlike the Federal Deposit Insurance Commission (FDIC), which was deeply involved in Operation Chokepoint 2.0, the OCC had maintained a more neutral stance. With the publication of Interpretive Letter 1183, it is now confirmed that Operation Chokepoint 2.0 has ended, removing key restrictions that previously hindered banks from directly engaging in cryptocurrency-related activities.
This move aligns with President Donald Trump’s campaign promise to end what he called the war on crypto. By granting banks the freedom to engage in core crypto activities, the doors to mass adoption and institutional integration are now wide open.
During the White House Crypto Summit on March 7, President Trump reiterated his commitment to regulatory clarity and promised to sign key crypto legislation by August this year.
Debate Over Federal Banks’ Role in Crypto Markets
While this policy shift has been welcomed by many in the industry, some leaders remain cautious about the increasing involvement of traditional banks in crypto markets. Critics argue that large financial institutions, with billions in Assets Under Management (AUM), could distort market competition and limit opportunities for decentralized projects.
Already, major banks are accumulating Bitcoin through ETF products, a process they may now conduct directly under the OCC directive. Anatoly Yakovenko, founder of Solana, has expressed concerns that government-backed institutions could alter the decentralization principles that are fundamental to the cryptocurrency industry.
Despite the OCC’s groundbreaking announcement, the broader crypto market has not reacted positively. Following the White House Crypto Summit, Bitcoin dropped 4.06% to $86,600, dragging altcoins down alongside it.
While regulatory clarity is expected to drive long-term adoption, the immediate market reaction suggests that traders are still digesting the potential implications of increased institutional involvement in the crypto space.
