US Banking Regulators Clarify Crypto Custody Requirements: Best Self-Hosted Wallet

As digital assets become more mainstream, U.S. regulators have clarified how banks can safely hold crypto for customers.

On July 14, 2025, the Federal Reserve, FDIC, and OCC issued a joint statement titled “Crypto-Asset Safekeeping by Banking Organizations.”

The statement does not introduce new regulations but clarifies existing expectations for banks looking to provide crypto custody services.

It outlines the operational, legal, and risk management frameworks banks must follow if they choose to hold crypto assets on behalf of customers.

This development represents a formal step in integrating digital asset custody into traditional banking infrastructure—but it also draws a clearer line between institutional custody and self-custody.

Key Points from the Joint Statement

The regulators define “crypto-asset safekeeping” as the holding of crypto on behalf of customers, specifically including control over cryptographic keys. Banks offering this service must:

• Demonstrate clear legal authority and customer agreements granting them control of assets.

• Maintain secure management of private keys, including strict internal controls and audit practices.

• Comply fully with AML, sanctions, and other regulatory requirements.

• Oversee any third-party service providers (e.g., sub-custodians) to the same standard as internal operations.

The statement emphasizes that banks bear full responsibility for custody services, regardless of whether operations are outsourced.

Institutional Custody vs. Self-Custody

While the guidance provides a clearer regulatory path for banks, it also highlights the differences between institutional custody and self-custody:

	Institutional Custody	Self-Custody Wallets
Key control	Held by the bank or its custodian	Held by the individual
Regulation	Subject to federal oversight	Generally unregulated (user is responsible)
Risk exposure	Dependent on bank solvency and systems	Dependent on individual security habits
Access limitations	May be restricted in certain scenarios	Fully user-controlled

For users who prefer direct control over their digital assets, self-custody wallets—such as hardware wallets or non-custodial mobile apps—offer an alternative that avoids the complexities of institutional involvement.

What the Statement Means in Practice

This statement from regulators signals a measured effort to integrate digital asset services into the banking system.

It sets a clear expectation for how institutions must approach risk, compliance, and operational control if they want to offer crypto safekeeping.

At the same time, the outlined requirements highlight the complexity and responsibility banks take on in providing custody.

For individuals and businesses already comfortable managing their own private keys, the message is clear: self-custody remains a practical and independent option.

While managing private keys can be technically challenging, it avoids third-party risk, offers greater privacy, and gives users full, uninterrupted access to their assets.

A Timely Reminder as Crypto Week Unfolds

The July 2025 joint statement is a step toward formalizing crypto within the U.S. financial system – but it also shows just how far traditional institutions have to go before offering trustworthy, secure digital asset services.

For now, many users may continue to favor self-custody wallets as a simpler and more direct way to manage their crypto.

The statement comes during Crypto Week, when Congress is debating three major crypto-related bills.

As the regulatory landscape evolves, it’s important for every crypto user – whether individual or institution – to carefully assess their custody options. Consider your own comfort with managing private keys, your risk tolerance, and the trade-offs between convenience and control.

Best Self-Hosted Wallets to Use

As investors reassess their custody options amid recent regulatory breakthroughs, one standout brand that continues to spring to mind is Best Wallet. 

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