OCC Gives U.S. Banks Permission to Broker Crypto Transactions

American banks can now intermediate crypto transactions in the same fashion market makers. Interpretive Letter 1188, published today by the Office of the Comptroller of the Currency (OCC), confirms that national banks may engage in "riskless principal crypto-asset transactions as part of the business of banking."

What's the Scoop?

• Crypto Middle Man: The OCC announced Tuesday that banks are authorized to intermediate "riskless" crypto transactions under the National Bank Act, as they already do with traditional assets like securities. This approval will allow banks to participate in crypto transactions, but requires them to offset the price risks of their inventory. For example, a bank can now purchase client BTC, so long as it hedges exposure via CME futures.
• Business of Banking: According to the OCC, such riskless crypto transactions are the equivalent of long-permitted brokerage activities, making them a logical extension of banks’ existing powers to buy and sell assets on behalf of customers.
• Synergistic Integrations: Banks that engage in other OCC-approved activities (like crypto custody and stablecoin payments) can rely on their infrastructure to facilitate crypto broker transactions, providing potential first-mover advantages to banks adopt blockchain early.