The U.S. Office of the Comptroller of the Currency (OCC) made headlines on May 7, 2025, when it issued Interpretive Letter 1184, giving federally regulated banks and savings associations the green light to custody, buy, sell, and outsource digital asset services. This long-anticipated guidance, coupled with similar moves by the Federal Reserve and FDIC, reverses previous constraints and opens a new chapter for crypto banking in the United States. So, prudential regulators are now aligned with President Trump’s pro-crypto agenda.
But beyond the ‘U.S. as crypto capital’ headlines lies a more pressing question: Who stands to benefit from this shift—and who might be left behind?
While major financial institutions are now poised to expand into the digital asset economy at scale, community banks and minority depository institutions (MDIs) may face far more obstacles than opportunities. The result? A looming two-tier crypto economy that risks reinforcing the very disparities crypto was supposed to disrupt.
A Green Light for Banks, but Not a Level Playing Field
Interpretive Letter 1184 reaffirms the OCC’s earlier position (first stated in Interpretive Letter 1170) that crypto custody is a “modern form” of legacy safekeeping. Banks are now permitted to provide these services directly or through partnerships with sub-custodians and third-party tech vendors. They can also facilitate cash-to-crypto transactions, tax reporting, and trade execution, all with the regulatory green light from the federal banking regulators.
Acting Comptroller Rodney Hood summed it up clearly:
“This digitalization of financial services is not a trend. It is a transformation. Regulated banks can now help customers manage crypto portfolios as they would traditional assets.”
Yet Hood was also careful to note that with this opportunity comes significant responsibility.
“We expect banks to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones.”
That expectation may be manageable for large national banks, many of whom have long been allocating resources to prepare for this pivot. But for smaller, community-focused institutions, it presents a significant challenge.
When Innovation Outpaces Inclusion
In financial innovation, timing is everything. And history tells us that access often arrives too late or on worse terms for marginalized, under-resourced communities and the institutions who serve them.
We saw it with subprime mortgages, with the fintech credit boom, and with algorithmic lending models. Today, crypto runs that same risk, offered as the next great frontier of finance, but developed primarily with early crypto adopters, high-net-worth speculators, and large institutions in mind.
According to the FDIC’s most recent national survey, 4.2% of U.S. households (representing approximately 5.6 million Americans) remain unbanked. That figure is disproportionately composed of Black, Hispanic, and disabled Americans. These are the very communities crypto was supposed to empower. But unless the rails of access are extended by institutions they trust (like community banks) crypto may simply become another financial product for the already financially privileged.
Community Banks: Cornerstones at Risk
Community banks, defined as locally controlled institutions with under $10 billion in assets, play an outsized role in fostering financial stability. As Tess Bower put it in her 2023 article, Community Banks: The Lifeline of Local Economies, these institutions are “economic catalysts, community builders, and educators.” They lead in small business lending, expand mortgage access in underserved areas, and reinvest locally.
So why aren’t they expected to lead in the crypto transformation?
1. Capacity Constraints
Unlike national banks, community banks often lack the capital reserves, legal infrastructure, and cybersecurity staffing to vet or deploy digital asset services. Even with the OCC’s allowance for outsourcing, onboarding third-party providers still carries significant costs and compliance responsibilities.
Without consortium-based infrastructure or government-backed grants, many institutions may find the operational lift too risky to justify.
2. Regulatory Risk Aversion
Community banks have historically exercised greater caution when regulatory guidance is ambiguous. Now, even as prior supervisory “non-objection” requirements are lifted, the compliance burden remains. As Hood emphasized, crypto activities must be conducted with “strong risk management controls”—a standard easier said than implemented without specialized teams.
For MDIs and Black-owned banks already under frequent examination, a single misstep could have outsize consequences. The question isn’t whether they want to serve crypto-curious clients—it’s whether they can safely afford to try.
3. Mission Misalignment and Community Trust
Community-focused banks, particularly those serving historically marginalized populations, face an additional layer of scrutiny. These institutions are trusted not just to provide services, but to uphold values. If crypto offerings appear speculative, opaque, or inconsistent with long-term wealth-building, they risk eroding customer trust or undermining financial education progress.
The Risk of a Two-Speed Crypto Economy
While megabanks race ahead, equipped with in-house legal teams and tech budgets measured in billions, community institutions may remain stuck on the sidelines. The result? A bifurcated system where crypto is:
- Seamlessly integrated into the portfolios of high-net-worth customers at large institutions
- Still perceived as risky, inaccessible, or predatory in lower-income communities
This bifurcation risks cementing crypto as a premium financial service—exactly the opposite of what many early blockchain advocates envisioned. And without inclusive rollout strategies, digital assets may simply reinforce the economic status quo.
Vendor Capture: A Trojan Horse Threat
Even where community banks do engage, new risks emerge. As banks increasingly rely on third-party crypto vendors, they may inadvertently surrender more than technical capacity; they may cede control of customer data, product design, and even brand equity.
Many of these vendors operate on a white-label basis, delivering services under the bank’s name while collecting proprietary data and deepening their own customer relationships. If unchecked, this dynamic could relegate community banks to front-end distribution partners in a system where value flows upward and out.
Building Bridges, Not Just Removing Barriers
To avoid this future, community banks need more than permission. They need resources, infrastructure, and support to onboard crypto offerings safely and meaningfully.
Some solutions worth exploring include:
- Shared Infrastructure Consortia: Pooling tech, legal, and compliance costs across similarly sized institutions
- Regulatory Sandboxes: Creating limited-risk pilots that allow real-time feedback and supervisory clarity
- Public-Private Grants: Especially for MDIs, to build vendor vetting frameworks, hire crypto compliance staff, or develop educational tools
The OCC has opened the gates. But whether those gates lead to equitable access or further entrenchment depends on who gets to walk through them, and how. And also, when. Remember, timing in emerging economic opportunities is often everything.
The Innovation Is Still Up to Us
Interpretive Letter 1184 is a welcome milestone, to be sure. It clarifies what banks can do. But it does not guarantee what they will do—or who they will serve in doing so.
The most important question now is not whether crypto will be offered by banks. That’s settled. The real question is:
Will digital assets become a bridge to financial empowerment or just another product for those who already have options?
The institutions that rise to meet this moment won’t be those that move the fastest but those that move with the most intention. That means partnering with care, building with community in mind, and refusing to let a digital divide become crypto’s legacy.
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