TRADITIONAL BANKING EMBRACES CRYPTO CUSTODY 2025 23 12

Traditional bank regulators have begun to explicitly allow banks to engage in crypto-asset safekeeping, and global banks are now receiving detailed guidance on how to bank stablecoin issuers, but this is not an unlimited “green light” and still comes with strict risk-management expectations.​

Regulatory guidance on crypto custody

In the United States, the Office of the Comptroller of the Currency (OCC) first confirmed in 2020 that national banks may provide cryptocurrency custody services, treating them as a modern form of traditional custody activities.​
In May 2025, the OCC reiterated in Interpretive Letter 1184 that OCC‑regulated institutions can custody digital assets and even buy and sell crypto assets held in custody for customers, provided activities are conducted in a safe and sound manner and under robust risk controls.​

Federal banking agencies later issued a joint statement in July 2025 outlining principles‑based guidance for banks considering crypto‑asset safekeeping, emphasizing risk assessment, technical expertise, BSA/AML compliance, and OFAC obligations rather than imposing a blanket prohibition.​
In Europe, supervisors such as BaFin have also issued frameworks for “crypto custody business,” setting authorization and operational requirements that enable licensed banks to offer custody at scale under clear rules.​

Wolfsberg Group guidance on stablecoin issuers

The Wolfsberg Group, an association of 13 major international banks focused on financial crime standards, published guidance in September 2025 on the provision of banking services to fiat‑backed stablecoin issuers.​
This guidance does not promote stablecoins, but instead gives banks a risk‑based framework for onboarding and monitoring issuers, covering issuer due diligence, transaction and on‑chain monitoring, sanctions screening, and alignment with the bank’s risk appetite.​

The paper’s core message is that banking a stablecoin issuer should follow the same principles as any other customer relationship: understand the customer’s risks and controls, compare them to the bank’s own risk appetite, and implement proportionate, ongoing oversight.​
This effectively lowers some legacy uncertainty about whether large correspondent banks may service stablecoin issuers, but it clearly conditions such services on strong financial‑crime compliance rather than offering unconditional approval.