The Office of the Comptroller of the Currency has confirmed that banks are permitted to engage as crypto intermediaries

The United States Office of the Comptroller of the Currency (OCC), according to a letter released on December 9, is giving banks the ability to carry out riskless principal transactions related to crypto assets. 

The document clarifies that TradFi banks that had been dipping their toes in via pilots can now go for full-scale crypto integration. 

The OCC has, over time, reversed the cautionary approach it took between 2021 and 2024, when it imposed strict guardrails and joined the Fed in warning about crypto risks, such as liquidity and volatility. 

As it stands, only a few purely crypto banks like Anchorage Digital hold OCC charters. With today’s letter, more hybrids could start to emerge soon.

The OCC’s letter gives banks the green light

According to the letter from the OCC, traditional banks are explicitly permitted to engage in riskless principal crypto-asset transactions, where the banks act as matched intermediaries in trades without the need to hold assets.

The letter clarifies that offering riskless principal crypto-asset transactions would benefit bank customers by providing them with more options and the ability to receive a service provided by a highly regulated bank. 

Customers would be able to transact crypto-assets via a regulated bank, as compared to non-regulated or less regulated options.

Also, in offering these types of transactions, the bank becomes an intermediary between the customer and counterparties with whom the customer may have no relationship. This can help customers manage their exposure to unregulated crypto-asset exchanges and pseudonymous counterparties on such exchanges, as well as provide the operational capacity needed to undertake such transactions.

The letter concluded by pointing out that, as with any activity, a bank that conducts riskless principal crypto-asset transactions must do so in a safe and sound manner and in compliance with applicable law. 

In the meantime, the OCC will examine riskless principal crypto-asset activities as part of its ongoing supervisory process.

The OCC’s boss believes crypto could help TradFi evolve 

While at a blockchain conference on Monday, Jonathan Gould, the head of the Office of the Comptroller of the Currency (OCC), pointed out that “custody and safekeeping services have been happening electronically for decades” and so “there is simply no justification for considering digital assets differently.” 

In fact, he highlighted the importance of not confining banks, including current national trust banks, to “the technologies or businesses of the past.” As far as he is concerned, the banking system has the “capacity to evolve from the telegraph to the blockchain.”

At the conference, he revealed that the OCC had received 14 applications to start a new bank so far this year, “including some from entities engaged in novel or digital asset activities,” which was nearly equal to the number of similar applications that the OCC received over the last four years.

“Chartering helps ensure that the banking system continues to keep pace with the evolution of finance and supports our modern economy,” he added. “That is why entities that engage in activities involving digital assets and other novel technologies should have a pathway to become federally supervised banks.”

And as for the concerns raised by banks and financial trade groups about crypto companies getting banking charters and the OCC’s ability to oversee them, Gould brushed those off. 

The OCC head insisted that such concerns “risk reversing innovations that would better serve bank customers and support local economies,” reiterating that the OCC already has years of experience supervising a crypto-native national trust bank, so there is little danger there. 

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