The U.S. Office of the Comptroller of the Currency (OCC) has confirmed that national banks can conduct cryptocurrency transactions under a risk-free model, expanding Vai as intermediaries in the digital asset market.
Amidst the rapidly developing digital asset market, US banks have just received a positive signal from regulators. On December 9th, the Office of the Comptroller of the Currency (OCC ) published Interpretation Letter No. 1188, clarifying the authority of national banks to conduct cryptocurrency transactions on a risk-free basis.
This move not only opens up regulated trading channels for customers but also lays the groundwork for the responsible participation of traditional financial institutions in the digital asset sector.
According to the new regulations , banks are permitted to Vai as intermediaries in cryptocurrency transactions without holding the assets in their own inventory. Specifically, a bank can Vai as the principal party with one client while simultaneously clearing a transaction with another client, operating similarly to a traditional broker. The OCC defines "risk-free" as a bank only clearing both sides of a transaction when there is an immediate clearing order, allowing the buying and selling processes to occur almost simultaneously.
This model is not unfamiliar in the financial industry. The explanatory letter notes that risk-free transactions are similar to long-standing brokerage and intermediary practices in the securities and Derivative markets.
In this structure, the bank only faces payment or credit risk at the nominal level, rather than the price volatility risk associated with holding assets. The OCC emphasizes the alignment of this operation with recognized banking functions, including asset custody services tailored to client needs and the principle of technology-neutral governance.
Existing infrastructure and management framework
One key factor highlighted by the OCC is that national banks now have the infrastructure to support other permitted crypto asset activities, including custody services, stablecoin-related functions, and blockchain network fee processing. This existing infrastructure effectively supports the liquidation and settlement process in risk-free transactions.
However, the OCC also sets stringent requirements for risk management. The agency identifies counterparty credit risk as the primary type of risk that banks need to manage, where institutions often have to liquidate assets quickly when counterparties fail to meet their payment obligations.
Banks must also ensure that transactions are conducted safely, soundly, and in full compliance with applicable laws and regulations. This monitoring will be incorporated into the regular oversight process by OCC inspectors.
Interpretation Letter 1188 marks a significant step forward in integrating crypto assets into the traditional U.S. banking system, creating a clear framework for financial institutions to participate in the digital asset market responsibly and under strict oversight.
