Federal Regulator Approves Riskless Crypto Trading for US Banks
The Office of the Comptroller of the Currency (OCC) has issued Interpretive Letter 1188, confirming that national banks may engage in riskless principal crypto-asset transactions as part of traditional banking activities. This means banks can now act as intermediaries by buying crypto-assets from one customer and selling them to another without holding inventory, marking the OCC's most aggressive move to integrate cryptocurrency into mainstream banking.
This framework applies to any crypto-asset, including those not classified under federal securities laws. Banks are required to offset market risk and face limited exposure to counterparty defaults, enhancing the safety of such activities. Additionally, banks must follow strict protocols like know-your-customer measures, transaction monitoring, and maintain the capability to freeze or reverse transfers if necessary. The OCC treats distributed ledger technology as a modern settlement method under this framework.
By enabling banks to trade crypto directly, the rule eliminates the previous need for banks to rely on third-party intermediaries and unregulated exchanges to offer crypto trading services to clients. Several major banks are already integrating crypto into their offerings; for example, Bank of America advisers can recommend Bitcoin ETFs, while JPMorgan Chase customers can fund Coinbase accounts using their Chase cards.
This OCC initiative is part of wider regulatory momentum concerning digital assets. Efforts include the proposed GENIUS Act, the FDIC's upcoming stablecoin regulatory framework, Federal Reserve coordination on stablecoin standards, and ongoing guidance on tokenized deposits. OCC head Jonathan Gould has defended the agency's approach to crypto charters, noting that around 14 national bank charter applications have been received this year from notable entities such as Coinbase, Circle, and Ripple.
