The Office of the Comptroller of the Currency (OCC) has clarified that federal banks can meddle with the cryptocurrency industry, lifting earlier impediments.Following the United States' adoption of Bitcoin and certain altcoins as reserve assets, a federal regulator has moved to encourage interaction with cryptocurrencies. Specifically, the OCC lifted an earlier clause discouraging financial institutions from servicing the digital asset industry.In a Friday release, the Office of the Comptroller of the Currency clarified that federal banks could participate in certain endeavors regarding virtual assets. Notably, this new wave of regulatory clarity aligns with the clamoring of the nascent industry and financial institutions.Banks Can Now Service Crypto FirmsThe published Interpretive Letter 1183 explicitly clarified that banks can engage in crypto custody, certain stablecoin enterprises, and distributed ledger verifications. Furthermore, the OCC revoked earlier guidelines that national banks and federal savings associations should request regulatory permission before meddling with the digital asset industry.Press release from OCCMeanwhile, the new policy disrupts the guidelines established by the former Biden administration. This aligns with Trump's pledge to reverse what he calls the tyranny of the Democratic president's four-year governance over cryptocurrencies.Rodney E. Hood, the acting comptroller of the currency, stated that the clarity addresses federal banks' skepticism about offering services to the crypto sector. Nonetheless, he expects financial institutions to put the right risk management procedures in play, as they do with traditional assets.Much-Needed ClarityMoreover, the OCC announced withdrawal participation in an earlier joint circular discouraging banks from meddling with cryptocurrency, citing its risk and market vulnerability. While the 2023 statement did not outright ban national banks from crypto-related services, it bred cautiousness and skepticism.Notably, Coinbase tried to lobby the OCC to release this statement last month. In February, the leading exchange sent a letter to federal regulators seeking a public stance to mitigate the friction between the digital industry and banks.Market watchers have branded the latest development bullish, especially for assets like XRP. Analyst Amonyx shared this sentiment, particularly as the ecosystems newly launched stablecoin RLUSD could gain mainstream adoption.
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