OCC allows U.S. banks to run riskless-principal crypto trades, broadening institutional spot access
The Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1188 (Dec. 9, 2025) clarifying that national banks may act as riskless principals in crypto-asset transactions — buying crypto from one customer and simultaneously selling to another without warehousing inventory on their balance sheets. The guidance reiterates existing statutory authority and requires banks to immediately offset exposure and maintain robust legal, AML/BSA, trading‑book, and third‑party risk controls. It follows other 2025 regulatory changes (Fed and FDIC rescinding pre-clearance regimes and prior OCC permissions for small token holdings for gas, custody via qualified third parties, and participation in tokenized settlement rails), together widening regulated distribution channels. For traders, key implications include potential increases in bank-mediated on-chain liquidity, narrower spot spreads, faster settlement via tokenized rails, and expanded institutional access to spot flows — all of which may reduce trading friction and influence short-term liquidity and volatility while supporting longer-term institutional adoption. The letter is nonbinding; banks must confirm charter authority and implement strong compliance and risk-management frameworks before scaling services.
Bullish
Allowing national banks to intermediate crypto trades as riskless principals lowers frictions for institutional access to spot markets. Banks can route customer flows into spot liquidity pools without warehousing inventory, which should increase on-chain liquidity provision, tighten bid-ask spreads, and speed settlement when combined with tokenized rails. These effects are typically supportive of price discovery and reduce trading costs—factors that are bullish for crypto spot demand. Short-term impacts may include reduced volatility from deeper liquidity and narrower spreads, though initial rollout could be neutral or mixed as banks scale services cautiously under strict compliance. Long-term, broader regulated distribution through wealth, corporate and private banking channels is likely to boost institutional adoption and steady incremental demand.