The Office of the Comptroller of the Currency (OCC) has provided clarity that national banks can act as intermediaries in cryptocurrency transactions, marking a significant step in integrating digital assets into the traditional financial system. The OCC's Interpretive Letter 1188 confirms that banks can engage in "riskless principal" transactions involving crypto assets. This allows banks to act as a principal between two customers, buying crypto from one and simultaneously selling it to another. The bank doesn't hold the assets in inventory, essentially functioning as a broker on behalf of clients.
In a "riskless principal" transaction, the bank purchases an asset from one party with the agreement to immediately resell it to another. The OCC already permits national banks to engage in riskless principal transactions involving securities, and the key difference with crypto assets is the technology involved. According to the OCC, this activity aligns with the "business of banking" under the National Bank Act. The agency views the practice as already permissible for securities and extends this to crypto-assets, fitting them into banks' established brokerage and custody activities.
This guidance follows a trend of easing restrictions on crypto activities within the traditional banking sector. In March, the OCC eliminated the need for banks to seek advance approval before engaging in certain crypto operations, signaling a growing acceptance of digital assets in mainstream finance. As a result, U.S. banks can now offer crypto services akin to traditional brokerage activities.
The OCC's decision has been influenced by applications from digital asset firms seeking bank charters. The agency has adopted a technology-neutral stance, emphasizing that the permissibility of an activity isn't determined by the technology used. The OCC analyzed the activity based on its similarity to recognized banking activities, its benefits to banks and customers, the nature of the risks involved, and whether state-chartered banks are authorized to perform it. Riskless principal crypto-asset transactions are similar to traditional brokerage and custody services, benefit customers by providing regulated access to crypto-assets, and carry familiar risks to banks, such as settlement risk.
The OCC's interpretive letter distinguishes between crypto-assets that are securities and those that are not. Riskless principal transactions in crypto-assets classified as securities are permissible under existing law because the bank acts without recourse, not assuming customer risk. The OCC extends this reasoning to crypto-assets that are not securities, framing the activity as part of the broader "business of banking".
The regulator also stated that banks engaging in these transactions 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 OCC emphasized the importance of robust risk controls, including cybersecurity and compliance programs, to ensure safe and compliant operations. The agency will examine riskless principal crypto-asset activities as part of its ongoing supervisory process.
Several institutions have already begun taking steps to incorporate digital assets into their services. Bank of America announced it would allow wealth management clients to allocate 1%–4% of their portfolios to digital assets. PNC Bank became the first major U.S. bank to offer eligible private bank clients direct bitcoin trading through its platform, powered by Coinbase's infrastructure.
