OCC lays out crypto banking after Trump vows to end Operation Chokepoint 2.0
The U.S. Office of the Comptroller of the Currency (OCC) has recently adopted a more accommodating position regarding banks’ engagement with cryptocurrency. This shift follows a declaration by former President Donald Trump to dismantle Operation Chokepoint 2.0, a prolonged initiative that limited crypto firms’ access to banking services. On March 7, the OCC announced that activities such as “crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks” would henceforth be permitted for national banks and federal savings associations.
In an Interpretive Letter 1183, the OCC stated that its regulated financial institutions would no longer require “supervisory nonobjection” to engage in crypto-related activities, a move aimed at reducing the barriers for banks wishing to enter this rapidly evolving space. Acting Comptroller Rodney E. Hood noted that this action is intended to ensure consistent treatment of such activities by the OCC and to promote responsible innovation while enhancing transparency.
Although the OCC’s revised guidelines were met with approval in the industry, figures like Caitlin Long, founder and CEO of Custodia Bank, expressed caution regarding the ongoing implications of Operation Chokepoint 2.0. Long emphasized that the operation continues to pose challenges until both the Federal Reserve and the Federal Deposit Insurance Corporation revoke their “anti-crypto guidance.”
This development came on the same day that Trump addressed a gathering of crypto executives at the White House Crypto Summit, where he reiterated his intent to end the operation. He criticized the previous administration’s approach to the crypto industry, labeling it excessively punitive and suggesting that the motivations behind its reversal were politically driven.
Operation Chokepoint 2.0 has been widely criticized for its impact, compelling banks to sever ties with various crypto businesses and entrepreneurs. Trump described it as a government-led initiative that “strong-armed banks” into closing accounts for crypto entities, effectively blocking transactions to and from exchanges.
In response to the constraints imposed by the operation, many firms turned to stablecoins to sustain their operations after losing access to traditional banking services. Senator Cynthia Lummis even raised concerns about the FDIC’s handling of information related to Operation Chokepoint, indicating ongoing scrutiny and demand for accountability.
As the regulatory landscape continues to evolve, the potential repercussions for the cryptocurrency industry, innovation, and transparency are still unfolding, marking a pivotal moment in its journey toward broader acceptance within mainstream finance.
