Three federal agencies in the U.S. government outlined the risks banks face if they decide to detain codes on behalf of their clients, according to documents jointly released by the agency on Monday.
The announcement states that the document “doesn’t generate any new supervision expectations,” but it could provide a framework for banks considering entering the crypto space, as some reports suggest.
According to a document entitled “Crypto Asset Safe Keeping by Bank Organizations,” bank risk assessments include the ability to understand complex and evolving asset classes. Possibility of liability in the event of a loss of crypto assets. Legal and compliance liability related to bank secret laws and anti-laundry regulations.
“Providing encrypted storage services can involve considerable resources and caution.” The three federal agencies responsible for this document are the Federal Deposit Insurance Corporation (FDIC), the Secretary of the Currency (OCC), and the board of directors of the Federal Reserve System.
In many cases, financial institutions use third parties to detain crypto assets. For example, BlackRock in Asset Manager uses Coinbase and subsequent anchorage to manage Bitcoin (BTC). BNY Mellon, the oldest bank in the United States, also provides clients with custody of digital assets.
The document points out that banks are responsible for “for activities carried out by subcustodians.” This advice could be important in the future if a bank custodian is hacked and the code is lost.
The agency says an audit program is essential and needs to address the nuances of crypto assets, including key generation, controls related to asset transfer and resolution, and staff expertise. If the audit program does not exist in the bank itself, “management must engage appropriate external resources to assess the encrypted custody operations.”
Related: Trump administration Mars’ “debanking” executive order: WSJ
A more favorable regulatory environment could appeal to banks
It shows that some banks are considering entering crypto. In May, the Wall Street Journal reported that a group of major banks was participating in “early talks” and publishing a joint Crypto Stablecoin.
Banks may seem more favorable to the current regulatory environment, particularly as governing bodies have made the transition to crypto. For example, the Federal Reserve has eliminated the “reputation risk” standard from bank surveillance. Critics say it was used to unfairly target the crypto business.
Also in May, acting chief Rodney Hood wrote to the banks and the Federal Savings Association saying that they could buy and sell cryptocurrencies in detention in the direction of their clients. In 2025, FDIC underwent a “regulatory reset” and eased banks’ crypto restrictions.
Some native crypto companies are considering going the opposite route. That in itself is to become a bank. On July 2nd, Ripple, creator of XRP (XRP), applied for a banking license through OCC. Circle, creator of Stablecoin USD Coin (USDC), did the same thing.
Magazine: Legal Panel: Crypto wanted to overthrow the bank, now they’re in the battle of Stablecoin
