OCC confirms permissible bank activities related to principal cryptoasset transactions 

The OCC confirmed permissible bank activities related to riskless principal transactions in cryptoassets.  

Details: In an interpretive letter, the OCC said:   

• A national bank may engage in riskless principal cryptoasset transactions as part of the business of banking.   

• Such transactions involve a bank acting as principal in a cryptoasset transaction with one customer while entering into an offsetting transaction with another customer.  

• In these transactions, the bank does not hold the cryptoassets in inventory, serving as an intermediary in a capacity equivalent to a broker acting as an agent. 

Recent Crypto Guidance: The interpretive letter is the latest step by prudential and markets regulators to issue guidance on a variety of cryptoasset products and services. 

• The OCC last month confirmed permissible bank activities related to paying cryptoasset network fees and said that a national bank may hold amounts of cryptoassets as principal necessary for testing otherwise permissible cryptoasset-related platforms.   

• The SEC in October indicated it would permit registered funds and advisers to use state trust companies to custody cryptoassets. 

• The federal banking agencies in July issued a joint statement to provide clarity on banks' engagement in cryptoasset-related activities, highlighting potential risk-management considerations related to holding cryptoassets on customers' behalf. 

• President Donald Trump’s Working Group on Digital Asset Markets in July released recommendations for digital financial technology.