U.S. banks allowed to hold cryptocurrency for clients: New guidelines simplify risk management

Three leading banking regulatory agencies in the U.S. (#OCC , #Fed , and #FDIC ) have just issued an important joint guidance on how banks should handle the storage of cryptocurrency assets for customers. This is not a new regulation, but a reminder that banks must strictly apply existing rules regarding risk management and legal compliance when engaging in this field.

It is important that banks are permitted to hold crypto for customers, whether through custody (trust) or direct holding. However, they must strictly adhere to all current laws and tightly manage any potential risks.

The main risks that banks need to pay special attention to include:

Cybersecurity: Ensuring systems are not attacked.

Management of "private keys": This is the most critical security code of cryptocurrency assets. If the bank holds this code, they will bear full responsibility in the event of any incident.

Price volatility of Crypto: The price of crypto can fluctuate very rapidly, and banks need to have a response plan.

Anti-money laundering and sanctions: Ensuring no dirty money or illegal transactions.

Partner monitoring: If outsourcing to a third-party company to hold crypto, the bank must still be responsible and needs to thoroughly check that partner.

In summary, this guidance allows banks to participate in the crypto market while simultaneously affirming that this is a high-risk and high legal responsibility activity that requires extremely tight oversight and management.