U.S. banks were officially permitted in mid-2025 to hold cryptocurrency assets, following new regulatory updates from federal agencies clarifying custodial services, marking a pivotal change in financial practices.
This regulatory shift promotes institutional trust in crypto, enabling banks to expand offerings and potentially increase market activity, particularly in Bitcoin and Ethereum custody services.
Key Developments in Crypto Custody
On July 14, 2025, U.S. federal agencies authorized banks to hold and manage crypto assets, reshaping banking-regulatory approaches nationwide.
This directive reflects a significant evolution in financial regulations, offering traditional banks enhanced roles in the crypto markets.
Federal Agencies Greenlight Crypto Custody for Banks
U.S. banks now possess official approval to handle crypto assets following a coordinated guidance from federal agencies. This shift includes crypto custody services, reflecting a crucial regulatory consensus.
The Federal Reserve, FDIC, and OCC have clarified the permissible activities surrounding crypto custody, expanding banking services and allowing institutions to engage in crypto-assets.
Bitcoin Custody Expansion Boosts Institutional Confidence
The move is expected to boost confidence among institutional investors, potentially increasing Bitcoin allocations. U.S. Bank has already resumed Bitcoin custody services as part of this shift.
Financial institutions are set to benefit from expanded service offerings, balancing risk management with enhanced crypto-market involvement. Regulatory clarifications alleviate previous uncertainties regarding digital assets.
Regulatory Advances Trace Back to 2020 OCC Letters
Historically, the OCC's 2020 interpretive letters laid the foundation for these advancements. The latest clarifications further ease procedural restrictions on banks engaging with cryptocurrency.
Experts predict increased institutional custody trends, as the expanded roles of banks align with more traditional financial oversight, potentially affecting market flows and trust in cryptographic services.
Industry Response
"We are excited to officially resume Bitcoin custody services for our institutional clients, reflecting our commitment to providing innovative and secure options in the evolving digital asset landscape."