Incidental banking activity refers to operations undertaken by banks that are secondary or supplementary to their primary financial services, yet are necessary for supporting those core functions. This could include certain technological services or data processing activities. In the context of digital assets, it might involve services that facilitate traditional banking functions but touch upon blockchain technology. Such activities are often subject to specific regulatory interpretations to determine their permissibility and oversight.
Context
The scope of incidental banking activity concerning digital assets is a frequent subject of regulatory scrutiny and interpretation, as financial institutions seek to participate in the evolving digital economy without exceeding their mandates. Discussions often address how existing banking charters accommodate novel technological services. Clarification on these boundaries is anticipated to influence the extent to which traditional banks can engage with digital asset custody, payments, and other related services.
The OCC's letter codifies a de minimis principal holding authority, strategically enabling federally-chartered banks to operationalize DLT integrations.
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