Joint Statement Reaffirms Existing Custody Rules
In the midst of America’s ‘Crypto Week,’ the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) released a pivotal joint statement clarifying how existing laws apply to banks offering crypto custody services. Rather than setting out new policies, the guidance reiterates that all digital asset activities must align with current supervisory frameworks. This joint release aims to remove ambiguity and ensure consistent application of compliance principles as the digital asset space evolves.
Risk Management and AML at the Core
At the heart of the guidance are four pillars: risk management, anti-money laundering (AML) compliance, technical key control, and audit readiness. Banks must have internal systems that can monitor crypto movements, detect suspicious transactions, and store cryptographic keys securely. Regulatory bodies are emphasizing a “safety-first” approach, ensuring that no loopholes are created in how digital assets are handled within federally insured institutions.
Context: Shifting Regulatory Tone in Washington
This reaffirmation of crypto guidelines marks a significant departure from the more cautious regulatory climate of previous years. Under former administrations, banks were often discouraged from working with crypto companies.
However, as the 2025 Congress actively debates legislation like the CLARITY and GENIUS Acts, federal agencies are now positioning themselves as facilitators of digital asset integration rather than opponents. This reflects a broader shift in Washington’s tone toward innovation and regulatory modernization.
Importance of Crypto Custody for Banks
The irreversible nature of blockchain transactions makes crypto custody uniquely sensitive. Mismanagement of cryptographic keys could mean irrecoverable loss of customer assets, something traditional banking systems rarely contend with. Banks are instructed to establish strong internal controls and contingency plans to protect these keys, ensuring that neither the client nor any third party can independently access the assets without proper authorization.
Stablecoins Drive Policy Forward
The timing of the statement is notable, aligning with congressional momentum behind the GENIUS Act—a bill focused on regulating stablecoin issuance at the federal level. Approved by the Senate and under House consideration, the bill offers a structure for how stablecoins like USDC and RLUSD can be issued and backed. With stablecoins acting as gateways between fiat and crypto economies, the need for clear custody and compliance rules has never been greater.
Ethereum’s Corporate Adoption Highlights Custody Needs
Beyond stablecoins, Ethereum’s growing adoption as a treasury asset among tech-forward companies further emphasizes the need for solid custodial infrastructure. Corporations like BitMine, BTCS, and GameSquare have collectively added hundreds of thousands of ETH to their balance sheets. This influx is driving demand for secure, scalable storage options. The move signals not just institutional interest in Ethereum but a requirement for banks to adapt quickly to serve these new client needs.
Sub-Custodian Oversight Key to Security
The agencies acknowledge that banks may rely on third-party sub-custodians for storing digital assets. However, institutions are expected to conduct rigorous due diligence before entering such partnerships. This includes evaluating how those sub-custodians manage cryptographic keys, what access controls are in place, and how liabilities are assigned in case of breach or loss. The emphasis here is on accountability — banks must own the responsibility for client assets, even when outsourcing storage.
Next Steps for U.S. Banks and Digital Asset Firms
Looking ahead, traditional banks and emerging crypto firms will need to align their custody operations with this clarified federal stance. While national bank charters for digital asset firms like Ripple and Circle are still pending, interim collaborations—such as Ripple choosing BNY Mellon to custody RLUSD assets—illustrate viable stopgap solutions. Banks seeking to enter the crypto space must update internal policies, enhance staff training, and deploy compliant custody technologies.
The Road to Regulatory Clarity
As ‘Crypto Week’ unfolds in Congress and the U.S. moves closer to enacting formal digital asset legislation, federal guidance like this joint statement will serve as an essential bridge. It underscores the government’s readiness to enable responsible innovation without sacrificing the safety of the financial system. For banks and digital asset firms alike, the message is clear: regulatory clarity is here, and operational excellence in custody is no longer optional—it’s required.
