- The OCC has approved crypto-asset transactions, enabling national banks to engage in riskless principal trades.
- Banks must meet operational and compliance standards to manage crypto transaction risks.
- OCC will continue updating its crypto framework, with further guidance expected by 2026.
The Office of the Comptroller of the Currency (OCC) confirmed today that national banks can conduct riskless principal transactions in crypto-assets. This ruling clarifies how regulated institutions can participate in digital markets. It comes at a time when banks, fintechs, and crypto firms are seeking clearer guidelines for blockchain-based services.
According to the recent letter, 1188, in the office, banks are able to match customer buy and sell orders on crypto trades. They are not necessarily required to keep inventory, provided that they are running safely and within the law.
OCC Confirms Risk-Free Crypto Transactions for Banks
This information is explained following the recent statements by Comptroller Jonathan Gould on December 8. Comptroller Jonathan Gould informed industry players that they should treat crypto companies seeking charters of national trust as regular financial institutions. According to Gould, the OCC received 14 bank applications this year from formidable crypto and fintech companies, such as Coinbase, Circle, and Ripple.
Gould noted that digital asset custody and other services are not solely marketing efforts aimed at regulated banking; rather, they have a long history of electronic handling.
Letter 1188 affirms the ability of national banks to participate in risk-free principal digital asset transactions. According to the OCC, the level of settlement and credit risk in these transactions is low, given that the banks conduct both parts of them at the same time.
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The letter explains this role as the legal and economic equivalent of a broker acting as an agent. The letter underscores that this structure forbids banks from engaging in speculation or inventory holding.
Crypto Transactions Require OCC Standards
The announcement is based on the November 18 guidance issued by the OCC, which permits the banks to have limited digital assets for operational purposes, including paying blockchain transaction fees. A previous letter, 1186, granted banks permission to conduct operations via blockchain, as permitted by the applicable rules.
These letters demonstrate that the OCC is trying to create specific rules to govern regulated financial institutions so they can participate in the digital asset economy without risking speculation.
The OCC decision is a positive move in the direction of banks investigating digital asset settlement and custody. However, the institutions are required to be up to supervisory standards and show the ability to control the operational and compliance risks involved.
However, the decision clearly defines what the law permits. Banks and other digital-asset companies will be paying close attention in case the OCC further clarifies its cryptocurrency framework while updating it by 2026.
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