What is the OCC? What does a Comptroller actually do? And why could their latest move create a clearer path to federal trust charters for crypto companies?
On Dec. 9, the Office of the Comptroller of the Currency (OCC) sent a direct message to U.S. banks: you are now explicitly permitted to sit in the middle of crypto trades. Through the release of Interpretive Letter 1188, the regulator confirmed that national banks may facilitate "riskless principal" transactions for crypto assets, acting as the buyer to one customer and seller to another while keeping no meaningful inventory of tokens on their own balance sheets.
The Regulatory Bridge: The OCC's latest guidance, including Letter 1188, creates a formal bridge between the traditional banking system and the digital asset market, allowing banks to participate in crypto brokerage without taking on direct asset risk.
🏛️ Conceptual Visualization | ⚖️ Source: OCC News Release 2025-121
"The OCC is not trying to wall crypto off from the banking system, but trying to work out which pieces of that activity fit within familiar categories like brokerage, custody, and fiduciary business, and under what conditions."
The Core of Interpretive Letter 1188: Key Facts
The OCC's clarification allows banks to match buy and sell orders, profiting from fees while avoiding direct cryptocurrency price risk. Source: OCC Interpretive Letter 1188.
Decoding the "Riskless Principal" Loophole
The new interpretive letter provides immediate, explicit comfort to U.S. national banks. They may now stand in the middle of customer crypto trades, structuring them as matched principal transactions. The bank buys a digital asset from Customer A and immediately sells it to Customer B, booking two offsetting positions. This leaves the bank with no net exposure to the asset's price volatility, facing only settlement and operational risk.
For tokens classified as securities, this activity rests on established ground under the National Bank Act. For other crypto-assets like Bitcoin and Ethereum, the OCC applied a four-factor test, concluding the activity still fits within the legal definition of the "business of banking." This represents a practical opening for large banks that have kept crypto at arm's length, enabling them to build customer-facing brokerage services with minimal balance sheet risk.
For large banks, Letter 1188 means they can build crypto brokerage and routing services that keep balance sheet risk near zero, moving beyond dabbling through loosely connected affiliates or leaving the field entirely to crypto-native exchanges.
The Battle for National Trust Charters
Letter 1188 did not occur in a vacuum. It is part of a broader strategic direction set by Comptroller Jonathan Gould, who has publicly brushed aside lobbying from the Bank Policy Institute (BPI) to block crypto firms from obtaining national trust charters. The BPI argues that crypto exchanges and stablecoin issuers seek to use these charters as a "back door" into bank-like activities without the full burden of deposit insurance and holding-company supervision.
| Stakeholder | Position on Trust Charters | Underlying Motive |
|---|---|---|
| Crypto Firms (Exchanges, Stablecoin Issuers) | Seek access to federal charters for custody, reserve management, and settlement. | Gain federal supervision, nationwide reach, and a potential path around stringent holding-company rules. |
| Traditional Banks (via BPI) | Argue trust charters are being misused for broader payment/ banking activities. | Protect competitive landscape; prevent "uneven playing field" where new entrants have lighter regulation. |
| OCC / Comptroller Gould | Technology-neutral stance; evaluates applicants on traditional merit (capital, management, risk controls). | Integrate crypto into existing regulatory framework; avoid creating a parallel, unbanked system. |
Comptroller Gould's logic is consistent: technology shouldn't be the dividing line. He points to decades of electronic custody for securities, asking why cryptographic claims on a distributed ledger should be treated as alien to banking. This philosophy underpins both Letter 1188 and the open door for qualified crypto firms to pursue trust charters.
The Path to Integration: The OCC's actions are methodically fitting crypto activities—trading, custody, fiduciary services—into long-established regulatory categories, moving the industry away from regulatory uncertainty and towards a supervised, bank-integrated future.
🧩 Conceptual Analysis | 🔄 The Gradual Clarification of Rules
Implications for Crypto Markets & Global Finance
The OCC's actions have profound implications for the structure of the crypto market:
Potential Future Landscape
How OCC guidance could reshape the core infrastructure of crypto markets in the U.S. and beyond.
- For Exchanges: A path to offer institutional clients a vertically integrated stack—trading, fiat settlement, and on-chain custody—within a federally supervised entity.
- For Stablecoin Issuers: The potential to hold reserves in an OCC-regulated trust bank, connected to Federal Reserve networks, enhancing credibility and stability.
- For Institutional Adoption: The phrase "OCC-supervised national trust bank" on a due diligence checklist carries significant weight, potentially easing entry for conservative asset managers and prime brokers.
Globally, the direction set in Washington tends to echo outward. If U.S. national banks begin offering riskless principal crypto brokerage under clear OCC guidance, it will influence service expectations in London, Frankfurt, and Singapore. A model of federally supervised crypto custody presents a stark alternative to the offshore exchange model that has dominated the past decade.
The message is not that the U.S. banking system has thrown its doors wide open. It is that the OCC has begun to pin specific crypto activities to concrete regulatory hooks: trading as riskless principal brokerage, custody as modern safekeeping, and trust charters as a home for fiduciary activity. In a market where regulatory uncertainty is the paramount business risk, this line-by-line, precedent-based clarification is a foundational shift that could be more crucial than any new law.
FAQ: OCC Letter 1188 & Crypto Banking
What is a "riskless principal" transaction?
It's a brokerage model where a bank (or broker) acts as the principal in both sides of a trade simultaneously. It buys an asset from one client and sells it to another at the same price, matching the orders. The firm profits from fees or a spread but assumes no inventory risk from holding the asset.
Why is the OCC's stance on trust charters a big deal?
A national trust charter grants a firm federal oversight, nationwide operating authority, and a prestigious regulatory status. For a crypto company, it's a path to legitimacy and integration with the traditional financial system that avoids the heavier requirements of a full commercial bank charter.
Does this mean banks will start offering crypto trading to retail customers?
Letter 1188 provides the authority for banks to do so. Whether and how they implement it will depend on each bank's risk appetite, operational capabilities, and customer demand. It likely paves the way for more institutional and high-net-worth services first.
About the Author: Andjela Radmilac
Andjela Radmilac is an analyst at CryptoSlate. Armed with a classical education and an eye for news, she dove into the crypto industry in 2018 after spending years covering politics. She specializes in analyzing the complex intersection of financial regulation, policy, and digital asset markets.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial, legal, or investment advice. Regulatory landscapes are complex and subject to change. Always conduct your own research and consult with qualified legal and financial advisors before making any decisions.