OCC clarifies authorized banking activities in Breaking News: finance and banking

Cadwalader, Wickersham & Taft LLP
November 26, 2021

In Interpretative Letter 1179, the OCC clarified the power (i) of banks of

engage in cryptocurrency activities and (ii) the OCC to charter

national trust banks.


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The OCC said a bank can engage in the activities described

in the interpretative letters 1170, 1172 and 1174,

which concern (i) cryptocurrency custody services, (ii) whether

banks can hold deposits to serve as “reserves

stablecoin ”, and (iii) the engagement of banks with

ledger technology for payment services, respectively. OCC

clarified that for a bank to engage in such activities, it

must demonstrate that it has “controls in place to

activity in a safe and healthy manner. The OCC clarified that

banks that intend to engage in such activities must first notify

their supervisory office and receive authorization. Supervision

offices should assess whether a bank’s risk management systems

and the controls are sufficient to engage in such activities.

The OCC also reiterated its clarification in Interpretation

Letter 1176 indicating that (i) the OCC has the power to

create a national bank which acts only as a trust company, and

(ii) the charter authority of the OCC does not extend or modify

the current responsibilities of banks under Part 9 (“Fiduciary Activities of

National Banks ”) of the OCC Rules. Regarding the evaluation

if the activities of an entity are limited to the operations of

a trust company, OCC has asserted that it retains the power to

assess “if an activity is carried out in a trust company

capacity for purposes of federal law.

Primary sources


OCC press release: OCC clarifies the authority of the bank for

Engage in certain cryptocurrency activities and OCC authority to

Charter of trusted national banks

Interpretive letter of OCC 1179

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Michael C. Sumner