OCC Confirms US Banks Can Facilitate Riskless Crypto Trades

OCC Endorses Riskless Crypto Trading for Banks

The US Office of the Comptroller of the Currency (OCC) has clarified that national banks can facilitate riskless principal cryptocurrency trades without holding assets on their balance sheets. This decision marks a significant step towards integrating traditional banking with regulated crypto brokerage services.

According to an interpretive letter issued by the OCC, banks can act as intermediaries in crypto trades by conducting offsetting transactions, akin to riskless principal activities in conventional markets. The letter highlights that this could expand service offerings in the burgeoning crypto market.

Regulatory Compliance and Risk Management

The OCC emphasizes the importance of legal compliance and risk management, urging banks to ensure any crypto activities align with their chartered powers. Institutions are expected to manage operational, compliance, and market risks, with a focus on counterparty credit risk.

The guidance refers to 12 U.S.C. § 24, which permits national banks to conduct riskless principal transactions as part of their core banking activities, further distinguishing between crypto assets that qualify as securities.

Crypto Integration in Banking

The OCC's guidance aligns with recent statements by Jonathan Gould, who advocates for treating crypto firms seeking a federal bank charter similarly to traditional financial institutions. Gould asserts that the banking system can adapt to include digital assets, which should not be treated differently from traditional banking services.

Shift in Regulatory Stance

Under the Biden administration, some industry observers accused regulators of a restrictive approach, labeled "Operation Choke Point 2.0." However, since President Trump took office, the federal stance has shifted towards supporting digital asset activities.