- U.S. banks can now act as intermediaries in crypto trades without holding digital assets on balance sheets.
- Regulatory changes allow banks to provide crypto custody execution and settlement services under federal rules.
- Riskless principal trading lets banks route crypto transactions with limited exposure and standard risk controls.
The Office of the Comptroller of the Currency (OCC) confirmed that U.S. national banks can engage in riskless principal crypto trades. Interpretive Letter 1188, issued on December 9, allows banks to buy cryptocurrency from one customer while simultaneously selling it to another. Banks do not need to hold digital assets on their balance sheets. The guidance positions banks as intermediaries, similar to brokers, without exposure to price volatility.
This change removes barriers to bank participation in crypto markets. Banks can process customer trades through their own channels. Wealth management, corporate banking, and private banking clients may see more efficient trade execution. The decision follows a series of 2025 regulatory moves that expanded banking roles in digital assets.
Expanded Banking Roles in Crypto
Interpretive Letter 1188 permits banks to act as principals while executing offsetting transactions. Banks must immediately offset exposure to maintain riskless operations. They remain subject to Bank Secrecy Act and anti-money laundering rules. Third-party risk management and trading-book controls also apply. The guidance clarifies that banks link buyers and sellers without taking market risk.
In 2025, the OCC permitted banks to keep minimal quantities of the crypto tokens used as network charges and test platforms. In May, banks were given permission to offer crypto custody and execution services using third-party sub-custodians. March guidance repealed the previous restrictions stating that banks were allowed to custody crypto and take part in distributed-ledger networks. These steps positioned crypto activities as part of routine banking operations. Moreover, OCC recently allowed U.S banks to hold crypto to pay blockchain network fees and support operations.
Federal Oversight Adjustments
The FDIC ended its pre-clearance notice requirement in March, letting banks engage in permissible crypto activities under normal supervision. The Federal Reserve withdrew prior supervisory letters in April, reducing barriers for state member banks exploring stablecoins and tokenized deposits. In July, the Fed, OCC, and FDIC jointly confirmed that banks could provide crypto safekeeping services. These changes lowered legal uncertainty and operational costs for banks connecting to crypto and tokenized payment systems.
The combined effect of these adjustments created a clearer regulatory environment. Banks can custody, execute, and intermediate crypto transactions, including paying network fees, without special approvals. Regulatory supervision remains through standard risk management and compliance frameworks.
Market Impact and Industry Implications
The riskless principal model enables banks to route crypto trades without warehousing coins. Banks can offer digital asset execution behind existing client relationships. Settlement risk is limited and comparable to derivatives or forex markets.
According to analysts, such clarity might embolden more banks to venture in digital asset markets. Banks can now offer controlled access to crypto, as well as provide cybersecurity and compliance measures. The guidance enhances federal supervision and also allows the secure access of digital assets by the customers.
