TLDR:
- The U.S. Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1186 confirming banks can hold crypto-assets on balance sheets to pay blockchain network fees.
- Banks may pay "gas fees" to facilitate otherwise permissible crypto activities and can hold crypto as principal for testing platforms.
- Activities must be conducted safely, soundly, and in compliance with the law.
- The guidance marks a shift in U.S. banking regulators' stance, opening doors for broader adoption of digital assets in regulated institutions.
The U.S. Office of the Comptroller of the Currency (OCC) has clarified the scope of permissible activities for national banks handling digital assets, signaling a notable shift in the regulatory approach to blockchain and crypto operations. In Interpretive Letter 1186 , published Tuesday, the OCC confirmed that national banks can pay network fees-commonly referred to as "gas fees"-on blockchain networks to support otherwise allowable activities. Furthermore, banks can hold crypto-assets as principal on their balance sheets to cover these network fees when they anticipate a reasonably foreseeable need.
This development comes at a time when U.S. regulators are actively engaging with digital asset policy. Blockchain networks require specific tokens to process transactions, and for banks seeking to operate within these ecosystems, maintaining sufficient crypto balances is crucial. Interpretive Letter 1186 offers legal clarity for institutions navigating these requirements.
What the Letter Means for Banks
National banks are now explicitly permitted to hold crypto-assets on their balance sheets to pay network fees, including gas fees for blockchain transactions. The guidance also allows banks to hold crypto-assets as principal for testing crypto platforms, whether developed internally or sourced externally.
Importantly, the OCC emphasized that these activities must be conducted in a safe and sound manner and must comply with all applicable laws. This aligns with the broader principle that banks remain responsible for risk management and operational oversight, even as they venture into digital asset operations.
This guidance removes ambiguity around banks' ability to hold crypto-assets in connection with operational needs, making it easier for regulated institutions to participate in blockchain-based finance.
Regulatory Context and Broader Implications
The OCC's guidance comes amidst evolving crypto regulation in the United States. Banking regulators, including the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Treasury Department, are drafting new rules for stablecoin issuers and other crypto-related activities. However, these rules are not yet finalized.
With Interpretive Letter 1186, the OCC has effectively expanded the operational flexibility of national banks in dealing with digital assets. This is particularly relevant for banks facilitating transactions involving tokenized currencies, decentralized finance platforms, or custody services. The ruling also provides a framework for banks to manage crypto-asset-related operational costs without running afoul of federal law.
The move reflects a significant shift under the current OCC leadership, which is led by Jonathan Gould, a Trump appointee confirmed by the Senate in July. Under previous administrations, banks faced greater hesitation in engaging directly with digital assets due to regulatory uncertainty. With this interpretive letter, the OCC signals a more permissive stance toward crypto activity in regulated institutions.
Aligning with the Stablecoin Ecosystem
Blockchain networks and crypto platforms often require users and institutions to pay fees in native tokens. By clarifying that banks can hold these tokens to meet operational requirements, the OCC is enabling banks to act as more active participants in the crypto ecosystem.
The interpretive letter also ties into ongoing legislative efforts, including the GENIUS Act, which outlines frameworks for stablecoin issuance and bank involvement. While the GENIUS Act rules are still in development, the OCC's guidance allows banks to navigate practical hurdles in the interim, such as paying network fees and maintaining operational readiness on crypto platforms.
Market Reactions and Future Outlook
Industry observers suggest that the OCC's letter may encourage more banks to explore digital asset operations, particularly in areas like custody, settlement, and payment facilitation. With the ability to hold crypto as principal for operational purposes, banks can integrate blockchain technologies more seamlessly into their existing financial services.
This could also pave the way for expanded adoption of tokenized assets in traditional banking, particularly as tokenized Treasurys, stablecoins, and other real-world assets gain traction in the market. For consumers and institutional clients, this regulatory clarity could translate into more reliable and secure crypto-related services from established banks.
Analysts note that, while the guidance does not yet authorize banks to engage in speculative trading of digital assets, it provides a critical foundation for practical engagement in blockchain-based operations. Banks may now consider broader applications, from facilitating cross-border payments using tokenized currencies to participating in decentralized finance platforms under clear legal boundaries.
Looking Ahead
Interpretive Letter 1186 represents a landmark moment in U.S. banking regulation for digital assets. By explicitly permitting banks to hold crypto-assets for paying network fees and testing platforms, the OCC has addressed a key operational bottleneck for regulated institutions.
As the U.S. regulatory landscape for stablecoins and other digital assets continues to evolve, national banks may increasingly serve as intermediaries between traditional finance and blockchain-based ecosystems. This could accelerate the integration of tokenized assets into mainstream financial services while maintaining the legal and operational safeguards necessary for banking institutions.
The OCC's guidance also underscores the agency's broader goal of supporting innovation in a controlled and safe manner, ensuring that U.S. banks can participate in emerging financial technologies without compromising compliance or stability.
