The U.S. Office of the Comptroller of the Currency has affirmed that domestic banks can conduct cryptocurrency transactions as risk-free intermediaries without holding the assets on their balance sheets, a move that brings traditional banks closer to offering regulated cryptocurrency brokerage services.
In an interpretation letter Published on Tuesday, the regulator said banks can act as principals in a crypto transaction with one customer while simultaneously entering into an offsetting transaction with another, a structure that reflects the risk-free principal activity in traditional markets.
“Several applicants discussed how conducting risk-free transactions in major cryptoassets would benefit their proposed bank’s customers and businesses, including offering additional services in a growing market,” the document notes.
According to the OCC, the move would allow customers “to transact cryptoassets through a regulated bank, compared to unregulated or less regulated options.”
The letter also reiterates that banks must confirm the legality of any crypto activity and ensure that it is consistent with their recognized powers. Institutions are expected to maintain operational, compliance and market risk monitoring procedures.
“The primary risk in risk-free principal transactions is counterparty credit risk (particularly settlement risk),” the letter said, adding that “the management of counterparty credit risk is an integral part of banking, and banks are experienced in managing this risk.”
Agency guidance cites 12 USC § 24which allows domestic banks to conduct risk-free principal transactions as part of the “business of banking.” The letter also distinguishes between crypto assets that are considered securities, noting that risk-free principal transactions involving securities were already clearly permitted under current law.
The OCC’s interpretive letter — a nonbinding guidance that outlines the agency’s view on what activities national banks can conduct under current law — was released a day after OCC head Jonathan Gould said crypto companies seek federal banking charter should be treated the same as traditional financial institutions.
According to Gould, the banking system has the “capacity to evolve” and there is “no justification for viewing digital assets differently” from traditional banks, which have been offering custody services “electronically for decades.”
Related: Trump’s national security strategy remains silent on crypto and blockchain
From “Choke Point 2.0” to pro-crypto policy
Under the Biden administration, some industry groups and lawmakers have accused U.S. regulators of pursuing a “Operation Choke Point 2.0” approach that has increased supervisory pressure on banks and companies 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.
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