OCC Interpretation Advances Regulated Crypto Brokerage Services for Banks
The US Office of the Comptroller of the Currency (OCC) has affirmed that national banks can intermediate cryptocurrency trades as riskless principals without holding the assets on their balance sheets. This development brings traditional banks a significant step closer to offering regulated crypto brokerage services.
In an interpretive letter released on Tuesday, the regulator stated that banks may act as principals in a crypto trade with one customer while simultaneously entering an offsetting trade with another. This structure mirrors the established practice of riskless principal activity in traditional financial markets. The document notes, "Several applicants have discussed how conducting riskless principal crypto-asset transactions would benefit their proposed bank’s customers and business, including by offering additional services in a growing market."
According to the OCC, this move would enable customers "to transact crypto-assets through a regulated bank, as compared to non-regulated or less regulated options."
The letter also reiterates that banks must confirm the legal permissibility of any crypto activity and ensure it aligns with their chartered powers. Institutions are expected to maintain procedures for monitoring operational, compliance, and market risks.
"The main risk in riskless principal transactions is counterparty credit risk (in particular, settlement risk)," reads the letter, adding that "managing counterparty credit risk is integral to the business of banking, and banks are experienced in managing this risk."
The agency’s guidance cites 12 U.S.C. § 24, which permits national banks to conduct riskless principal transactions as part of the “business of banking.” The letter further draws a distinction between crypto assets that qualify as securities, noting that riskless principal transactions involving securities were already clearly permissible under existing law.
Shifting Regulatory Stance Under New Administration
The OCC’s interpretive letter, which serves as nonbinding guidance outlining the agency’s view on activities national banks may conduct under existing law, was issued a day after the head of the OCC, Jonathan Gould, stated that crypto firms seeking a federal bank charter should be treated the same as traditional financial institutions.
According to Gould, the banking system possesses "the capacity to evolve," and there is "no justification for considering digital assets differently" than traditional banks, which have offered custody services "electronically for decades."
From ‘Choke Point 2.0’ to Pro-Crypto Policy
Under the Biden administration, some industry groups and lawmakers accused US regulators of pursuing an “Operation Choke Point 2.0” approach. This approach was characterized by increased supervisory pressure on banks and firms interacting with crypto.
Since President Trump took office in January, after pledging to support the sector, the federal government has moved in the opposite direction, adopting a more permissive posture toward digital asset activity.