OCC clears U.S. banks to run riskless principal crypto trades in 2025

Source: Cryptonews Original Title: OCC clears U.S. banks to run riskless principal crypto trades in 2025 Original Link:

Overview

The Office of the Comptroller of the Currency published Interpretive Letter 1188 on December 9, confirming that national banks have the authority to engage in riskless principal crypto-asset transactions. This represents the latest in a series of regulatory moves in 2025 that have removed barriers to bank participation in digital asset markets.

Riskless Principal Framework

The letter allows banks to act as intermediaries by purchasing cryptocurrency from one customer while simultaneously selling to another without holding coins in inventory. Banks can now act as principals in crypto-asset transactions with one customer while simultaneously entering offsetting transactions with another customer, positioning themselves as intermediaries without requiring balance sheet exposure.

The structure requires banks to:

• Conduct riskless principal activities in compliance with applicable law
• Remain subject to Bank Secrecy Act and anti-money laundering requirements
• Maintain third-party risk management standards and trading-book controls
• Offset exposure immediately to preserve the riskless nature of transactions

Market Impact

The confirmation expands regulated distribution channels for crypto market activity by enabling banks to participate in trade flow without exposure to price volatility. Banks can now intermediate customer crypto trades through their own channels, potentially affecting spreads and settlement processes for wealth management, corporate banking, and private banking clients.

The regulatory clarity positions U.S. banks to offer customer interfaces with crypto execution operating behind existing wealth management and corporate banking relationships without requiring separate exchange accounts or introducing balance sheet crypto exposure.

2025 Regulatory Timeline

March: Interpretive Letter 1183 reset the regulatory framework by rescinding Letter 1179 and reaffirming the permissibility of crypto-asset custody, certain stablecoin activities, and participation in distributed-ledger networks. The OCC framed these functions as part of, or incidental to, the business of banking.

March: The Federal Deposit Insurance Corporation eliminated its 2022 pre-clearance notice regime, informing FDIC-supervised banks they could engage in legally permissible crypto activities without prior approval, provided risks were managed through normal examination processes.

April: The Federal Reserve withdrew its 2022 and 2023 crypto and dollar-token supervisory letters alongside interagency risk statements, removing specific hurdles for state member banks exploring stablecoin and tokenized-deposit infrastructure.

May: Guidance reaffirmed that banks could provide crypto custody and execution services for customers while outsourcing those functions to qualified third parties, subject to standard third-party risk management frameworks.

July: The Fed, OCC, and FDIC issued a joint statement confirming that banks could offer crypto-asset safekeeping services when conducted in compliance with existing rules.

November: The OCC stated that banks could hold small amounts of native tokens on their balance sheets to pay network gas fees and test permissible platforms.

December: Interpretive Letter 1188 confirmed riskless principal crypto-asset transaction authority.

Broader Implications

The combined effect of the year’s regulatory moves created clearer authority for banks to custody, execute, intermediate, and operate on-chain infrastructure, including network fee payments. The removal of pre-clearance requirements at the FDIC and Fed reduced legal uncertainty and operational overhead for banks connecting to crypto settlement and tokenized payment systems, effectively tightening supervision while widening on-chain distribution channels.