The US banking regulator, the Office of the Comptroller of the Currency (OCC), has significantly expanded the regulatory framework for crypto activities conducted by US banks through a series of interpretive letters.
With the most recent letter, banks are now permitted to act as intermediaries in so-called “riskless principal” transactions – a milestone that will accelerate the integration of digital assets into the traditional banking system. Interpretive Letters 1183, 1184, and 1188 together form a comprehensive legal framework enabling federally chartered banks and savings associations to provide crypto custody services, conduct stablecoin activities, participate in blockchain networks, and act as brokers for digital assets. The OCC thereby removes prior restrictions that required banks to undergo a burdensome approval process before offering crypto services.
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Riskless principal transactions as a broker function
The most recent interpretive letter, 1188, confirms that federally licensed US banks may act as principals in crypto transactions when they simultaneously execute an offsetting transaction with another customer. In this model, the bank purchases a digital asset from one customer and immediately sells it to another, without holding the assets on its own balance sheet.
The OCC argues that this type of intermediation minimizes market risk because the transactions occur almost simultaneously. Banks retain only limited credit risk. “The OCC has long taken a technology-neutral position regarding permissibility,” the letter states. The agency has allowed federally chartered US banks to conduct riskless principal transactions in securities for years – the key difference with crypto assets lies in the technology used, not in the fundamental structure of the transactions.
The bank effectively acts as a broker executing trades on behalf of customers without taking speculative positions in digital assets itself. However, the OCC emphasizes that such activities must be conducted “in a safe and sound manner” and will be evaluated as part of ongoing supervisory review.
Comprehensive authorities for custody and execution
With Interpretive Letter 1183, published in March 2025, the OCC also confirmed that crypto custody, certain stablecoin activities, and participation in independent blockchain networks are permissible banking activities. At the same time, the agency removed the requirement that supervised institutions obtain a supervisory non-objection before commencing such activities – a process widely regarded by the industry as a significant barrier.
The subsequent May 2025 letter, 1184, clarified that banks may buy and sell digital assets held in custody on behalf of their clients. They may also outsource permissible crypto activities to third-party providers, provided that appropriate third-party risk management practices are followed. This enables institutions to integrate specialized technology partners without breaching regulatory requirements. The range of permissible services includes transaction settlement, trade execution, bookkeeping, valuation, tax services, and reporting. All activities must comply with applicable laws and maintain “strong risk management controls,” as Acting Comptroller of the Currency Rodney E. Hood emphasized.
The repeal of Staff Accounting Bulletin 121 (SAB 121) by the SEC in January 2025 served as another catalyst. The rule had previously required banks to record crypto assets held on behalf of clients on their own balance sheets at fair value, creating substantial capital and compliance burdens. Industry estimates suggest that the institutional custody market for digital assets grew to USD 683 billion by 2025, with banks and ETFs accounting for over 65 percent.
International comparison and outlook
While the United States, through the OCC framework, is implementing a pragmatic opening of the banking system to crypto services, European jurisdictions are taking varied approaches. Switzerland has introduced amendments to the Financial Institutions Act establishing two new license categories for digital assets – the “Payment Instrument Institution License” for stablecoin issuers and the “Crypto Institution License” for crypto service providers. Up to 55 banks in Europe now offer crypto-related services, with non-EU countries such as Switzerland, Liechtenstein, and the United Kingdom remaining leaders in service breadth.
In the United States, the OCC received a total of 14 applications for de novo bank charters in 2025, including several from companies focused on digital assets. Anchorage Digital remains the only federally licensed crypto bank under OCC supervision. Acting Comptroller Hood identified the “expansion of responsible banking activities in digital assets” as one of the agency’s four strategic priorities in an April 2025 speech before the Exchequer Club.
The gradual convergence of traditional financial institutions with the crypto market is occurring in parallel with a political realignment in Washington. The Federal Reserve, the OCC, and the FDIC have rolled back restrictive guidance issued in previous years. For institutional investors, this regulatory clarity is likely to pave the way for broader product offerings and deeper market integration – provided that banks meet the OCC’s required risk-management standards.
