OCC Permits Riskless Crypto Transactions for Banks

The Office of the Comptroller of the Currency (OCC) has confirmed that U.S. national banks can engage in riskless principal crypto-asset transactions, according to recent interpretive letters.

This allows banks to safely enter the cryptocurrency market, potentially reshaping traditional financial services and impacting cryptocurrencies like Bitcoin, Ethereum, and stablecoins through regulated intermediaries.

The OCC confirms that national banks can conduct riskless principal crypto transactions under specific conditions, offering new avenues for institutional crypto engagement.

This regulatory move enables banks to facilitate crypto-fiat exchanges and related services, potentially increasing institutional participation in cryptocurrency markets.

OCC Greenlights Riskless Crypto Transactions for Banks

The Office of the Comptroller of the Currency has clarified that national banks can engage in riskless principal crypto-asset transactions. This decision allows banks to facilitate crypto-fiat exchanges safely and soundly.

Under this guidance, banks can buy and sell crypto-assets simultaneously without holding them on their balance sheets. The OCC emphasizes compliance with safety and soundness standards.

Banks to Expand Crypto Services Following OCC Ruling

The ruling permits banks to offer new services in the crypto market, which may increase their customer options for crypto transactions. Institutional adoption of crypto could significantly rise as a result.

By expanding their crypto services, banks could foster greater trust and security in the cryptocurrency market, aligning these activities with existing regulatory frameworks and risk management practices.

OCC Decision Mirrors 2020 Crypto Custody Precedent

Historical precedents show that similar OCC actions have resulted in increased institutional inflows into crypto. The 2020 allowance for crypto custody led to banks such as Silvergate expanding their services.

Based on past trends, incorporating risk management frameworks could position traditional banks as major players in the crypto market, potentially transforming market dynamics and increasing institutional trust. Speaking on the recent developments, Jonathan Gould, Comptroller of the Currency, stated: “The OCC has taken concrete steps to increase transparency, retire ‘reputation risk’ as a supervisory lever, and investigate alleged unlawful debanking by large institutions. We are committed to ensuring that banks can serve all lawful customers, including those in the crypto-asset sector, consistent with safety, soundness, and the law.”