OCC Issues Another Crypto-Friendly Interpretive Letter: Permissibility of Riskless Principal Crypto-Assets Transactions

On December 9, 2025, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1188 (IL 1188), confirming that a national bank is permitted, as part of the business of banking, to engage in riskless principal crypto-assets transactions.

背景介绍

IL 1188 specifies that a “riskless principal transaction” is one in which “an intermediary purchases an asset from one counterparty for immediate resale to a second counterparty, the ultimate purchaser of the asset,” and whereby the “intermediary’s purchase of the asset from the initial counterparty is conditioned on an offsetting order from the second counterparty to purchase the same asset from the intermediary.” A national bank, as the intermediary, would generally not hold any asset in connection with a riskless principal transaction, but rather conducts itself as the “legal and economic equivalent” of a broker acting as an agent.

Riskless Principal Transactions in Crypto-Asset Securities

National banks are granted “all such incidental powers as shall be necessary to carry on the business of banking” pursuant to 12 U.S.C. § 24(Seventh), including dealings of securities “without recourse.” IL 1188 states that when a national bank engages in a risklessprincipal transaction, it does not assume “any customer’s risk of loss or any liability as guarantor or endorser of the value of securities to its customers,” and therefore is acting “without recourse” as defined under § 24(Seventh). Further, the OCC contends that the novel features that may be present with a security and/or a crypto asset does not change the risk analysis or permissibility under § 24(Seventh).

Riskless Principal Transactions in Crypto-Assets that Are Not Securities

In addition to the enumerated powers under 12 U.S.C. § 24(Seventh), the OCC has promulgated regulations to further define the “business of banking” and has identified a non-exhaustive list of activities thereunder. Under 12 C.F.R. § 7.1000(c)(1), the OCC considers the following factors when determining whether an activity is part of the business of banking:

• Whether the activity is the functional equivalent to, or a logical outgrowth of, a recognized banking activity;
• Whether the activity strengthens the bank by benefiting its customers or its business;
• Whether the activity involves risks similar in nature to those already assumed by banks; and
• Whether the activity is authorized for state-chartered banks.

In IL 1188, the OCC contends that the first three factors weigh “strongly in favor” of determining that riskless principal crypto-asset transactions are part of the business of banking. The OCC states that riskless principal crypto-asset transactions are both the functional equivalent to recognized bank brokerage activities and are a logical outgrowth of crypto-asset custody activities. Further, the OCC contends that offering riskless principal crypto-asset transactions would benefit bank customers because customers could transact crypto-assets through a regulated bank, as compared to non-regulated or less regulated options.

 Whether the activity involves risks similar in nature to those already assumed by banks is a question of whether the underlying asset and technology affect the nature of the risks assumed by the bank for these transactions. The OCC generally takes a technology-neutral approach to its regulatory application, particularly as it relates to permissibility. Consistent with that approach, the OCC concludes in IL 1188 that riskless principal crypto-asset transactions face the same counterparty risks and settlement risks as do other riskless principal transactions.

The OCC notes that state banks have long engaged in riskless principal transactions with respect to securities and that because state regulatory frameworks concerning crypto-asset activities are still developing, this last factor should not weigh against the permissibility of determining that national banks may engage in riskless principal crypto-asset transactions.

Final Takeaways

IL 1188 was issued in response to “facts presented by recent [bank charter] applicants.” This interpretive letter indicates a continued welcoming of novel and crypto-friendly charter applications with the OCC. IL 1188 footnote no. 1 also states that there may be other instances where a national bank could hold crypto assets outside the contexts discussed in IL 1188.

IL 1188 was preceded by OCC Interpretive Letter 1186 (IL 1186), published on November 18, 2025, which also addressed crypto-activity permissibility by national banks. Specifically, in IL 1186, the OCC confirms that it is permissible as a part of the “business of banking” for a national bank to pay network fees on blockchain networks to facilitate otherwise permissible activities and hold, as principal, amounts of crypto-assets on the balance sheet necessary to pay network fees for which the bank anticipates a reasonably foreseeable need.

The increasing focus on crypto-friendly approaches from the OCC — see also, OCC’s Dec. 10, 2025 News Release related to debanking digital asset businesses — may indicate that the OCC would favorably view lending against crypto-based collateral. However, the recent passage of the Genius Act raises some questions regarding the practicality of such lending. Specifically, the Genius Act prohibits issuers of stablecoins from paying stablecoin holders any interest or yield. Pub. L. No. 119-27, S. 1582, 119th Cong. (2025), Sec. 4(a)(11). While the Genius Act preserves the authority of banks to engage in permissible activities, there has been growing debate regarding the interpretation of the interest and yield prohibition. It remains to be seen whether such prohibition will be narrowly interpreted to apply only to stablecoin issuers or whether federal regulators may apply the prohibition more broadly to other stakeholders such as banks or digital asset exchanges, whether in promulgated regulation or in practice.

Foley Can Help

Foley & Lardner LLP’s Blockchain & Digital Assets Group andFinancial Services Regulatory Team partners with leading banks, fintechs, and investors at the forefront of digital finance. We help clients navigate the intersection of regulation, innovation, and enforcement — structuring products, engaging with regulators, strengthening compliance frameworks, and defending high-stakes disputes. With respect to digital assets, our integrated approach positions clients to capture opportunities in the digital assets industry while protecting their businesses against regulatory and market risks. Our financial services regulatory experience brings together a deep bench of attorneys well-versed in banking permissibility, chartering, and regulatory compliance, as well as in financial market utilities, Bank Secrecy Act/Anti-Money Laundering, and bank-fintech strategic partnerships.

Please contact any of the authors or your Foley attorney if you have any questions about the issues discussed above.