OCC Greenlights "Riskless Principal" Crypto Trades For National Banks

On December 9, 2025, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1188, confirming that national banks may intermediate crypto-asset trades as "riskless principals," essentially acting as brokers between two customers, without being treated as proprietary crypto traders.

For regulated institutions that have been caught between client demand and supervisory skepticism, this is a meaningful step toward letting banks, not offshore platforms, sit in the middle of crypto flows.

The OCC's Position on Riskless Principal Transactions

At a high level, the OCC concludes that:

1. A national bank may buy a crypto-asset from one customer and immediately resell it to another customer in a matched, "riskless principal" transaction. The bank takes title only momentarily and does not carry inventory, except in rare settlement-failure scenarios.
2. These transactions are part of the "business of banking" under 12 U.S.C. § 24(Seventh). They are the legal and economic equivalent of traditional brokered financial investment instruments, and the risks are familiar (settlement, operational, counterparty credit) rather than novel market bets on crypto price.
3. The analysis applies both to crypto-asset securities and non-securities; for the latter, the OCC leans on its four-factor "incidental powers" test in 12 C.F.R. § 7.1000 (functional equivalence, customer benefit, comparable risks, and parity with state-chartered banks).
4. The letter reiterates, by reference to earlier guidance, that banks may hold limited amounts of crypto as principal to pay network fees or hedge customer-driven positions, but this is not a permission slip for proprietary trading.
5. As always, activities must be conducted in a "safe and sound" manner and in compliance with all applicable law, including capital, liquidity, BSA/AML, sanctions, and consumer protection requirements.

In short, the OCC will apply the same general standard for evaluating a bank's involvement in riskless principal transactions involving cryptocurrencies that it applies to riskless principal transactions involving brokered financial investment instruments such as derivatives.

In other words, the OCC is saying: if you want to stand in the middle of a riskless principal crypto trade the way you stand in the middle of a riskless principal securities trade, we will treat you like a bank, not a rogue exchange, so long as you behave like a bank.

Why this Matters for Banks, Fintechs, and Crypto Firms

For bank leadership and in-house counsel, the letter does three important things:

First, it brings crypto trade execution inside the perimeter. Clients have been routing significant digital-asset activity through lightly-regulated venues. Allowing national banks to intermediate those trades, without forcing them to take balance-sheet positions, should make it easier to offer cryptocurrency services in a way supervisors can recognize and examine.

Second, it narrows, but does not eliminate, the gray area. The OCC is clear that it views this as technology-neutral evolution of well-understood brokerage activities, not a wholesale re-imagining of what banks may do with digital assets. That framing is helpful for regulated institutions that have been whipsawed by shifting rhetoric over the last few years, but it also means banks will be judged on how cleanly they stay within the riskless-principal lane.

Third, it signals an internal policy shift after years of inter-agency mixed messages on cryptocurrency.

For executives, that's welcome, but it also raises the familiar concern that another administration or another regulator could later decide the boundary lines should have been drawn tighter.

Key Takeaways for Legal and Compliance Teams

• Practical path to crypto execution without turning the bank into an exchange. Letter 1188 gives national banks a credible legal basis to stand between crypto buyers and sellers as matched-principal intermediaries. Done correctly, that lets banks keep client assets and flows within a supervised environment while avoiding the risk profile of holding large token inventories on balance sheet.
• Riskless principal is a narrow concept, so document it like one. To stay on the right side of this guidance, trades must be tightly matched, with clear procedures showing that the bank only executes when it has both sides locked in and disposes of any residual positions promptly in a settlement failure. Policies, booking models, and trade data should make it easy for examiners (and, in a bad year, enforcement staff) to see that the bank is not quietly morphing into a proprietary crypto desk.
• Same alphabet soup of controls as riskless principal securities or derivatives transactions, just with blockchain plumbing. OCC emphasizes that these activities must be "safe and sound" and subject to the same intensity of risk management a bank would apply to complex securities or derivatives activity: KYC and sanctions screening on both legs, accounting for counterparty credit risk, and clear incident-response playbooks for blockchain forks, outages, and protocol exploits.
• Charter and multi-regulator alignment still matter. The letter speaks only for the OCC. Bank holding company structures, state law, and expectations from the Fed, FDIC, SEC, and CFTC all still need to be mapped before launch. For some groups, the gating item may be holding company or broker-dealer issues rather than the national bank charter itself. The risk is not that OCC is hostile here, but that another regulator second-guesses how far "incidental powers" should stretch in the crypto context.
• Strategic opening for bank–fintech–crypto partnerships. For fintech and crypto companies, the message is that if you can live with bank-grade compliance, there is now a clearer path to offering your clients bank-intermediated crypto execution. For banks, this is an opportunity to reclaim intermediation from unregulated venues, but also a reminder that supervisors will expect you to do so in a safe and sound manner that complies with applicable law.

The OCC's announced approach to bank intermediation of crypto-asset trades is more opportunity than threat to banks and cryptocurrency companies, but it does move another regulatory line in a space that is already crowded with overlapping regimes and shifting expectations. Any bank, fintech, or crypto platform thinking about offering riskless-principal crypto transactions should treat this as the start of a conversation, not a green light to improvise at will. Careful work on product design, booking, documentation, and controls, in close coordination with internal stakeholders and experienced regulatory counsel, will be essential to capture the potential upside here without inviting avoidable second-guessing from supervisors or, in a worst-case scenario, enforcement authorities.

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