The OCC affirmed that certain cryptoasset activities are part of, or incidental to, the business of banking and conditionally approved five national trust bank charters for digital asset entities.

By Arthur S. Long, Parag Patel, Pia Naib, Connor Jobes, and Deric Behar

Key Points:

  • The OCC affirmed that national banks may conduct riskless principal transactions in cryptoassets, when conducted in a safe and legally compliant manner.
  • The OCC affirmed banks’ ability to pay blockchain network fees and hold limited amounts of cryptoassets as principal to facilitate otherwise permissible activities.
  • In conditionally approving the five national trust bank charters, the OCC made clear that the federal government is taking a lead role in the integration of digital assets into the banking system.

Introduction

Throughout 2025, the Office of the Comptroller of the Currency (OCC) has taken the lead on expanding banks’ ability to engage in cryptocurrency-related activities without the need for a supervisory non-objection from the OCC. That expansion began with the OCC issuing interpretive letters that clarified national bank authority regarding cryptoasset custody and execution services (see this Latham blog post), certain stablecoin activities (see this Latham blog post), participation in independent node verification networks (see this Latham blog post), and cryptoasset safekeeping (see this Latham blog post).

The OCC recently released two interpretive letters to provide greater clarity with respect to how national banks may (i) engage in riskless principal transactions in cryptoassets, and (ii) pay blockchain network fees and hold limited amounts of cryptoassets as principal to facilitate otherwise permissible activities.

Then, on December 12, the OCC announced its conditional approval of five digital asset entities’ applications for national trust bank charters, including two de novo national trust bank charters (for First National Digital Currency Bank and Ripple National Trust Bank) and three conversions from state trust companies to national trust banks (for BitGo Bank & Trust, NA; Fidelity Digital Assets, NA; and Paxos Trust Company, NA).

The Trump administration has been supportive of integrating digital assets into the traditional financial system. The OCC’s recent actions demonstrate considerable flexibility in interpreting the business of banking under the National Bank Act, in a manner reminiscent of the OCC’s approach to national bank derivative activities in the 1990s.

Riskless Principal Crypto Transactions

On December 9, 2025, the OCC issued Interpretive Letter 1188, confirming that national banks may engage in riskless principal cryptoasset transactions as part of the business of banking. According to the OCC, “[i]n a riskless principal transaction, an intermediary purchases an asset from one counterparty for immediate resale to a second counterparty, the ultimate purchaser of the asset. 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.”

Noting that riskless principal transactions in securities are generally permissible banking activities under 12 U.S.C. § 24(Seventh), the OCC stated that the inclusion of “a security that has some novel features” — such as a cryptoasset security — would not affect the permissibility analysis. Regarding riskless principal transactions in cryptoassets that are not securities, the OCC interpreted this activity under 12 C.F.R. § 7.1000(c)(1), which states that whether an activity may be considered part of the business of banking depends on if the activity:

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

The OCC found that riskless principal cryptoasset transactions are permissible by analyzing each factor in turn:

  • Riskless principal cryptoasset transactions are analogous to long-recognized brokerage and intermediation activities, including riskless principal securities transactions, customer-driven derivatives with transitory title transfer, and securities conduit lending. The OCC also viewed the activity as a logical extension of bank-permissible crypto custody and execution services.
  • Riskless principal cryptoasset transactions conducted through a regulated bank can reduce customer exposure to unregulated venues and pseudonymous counterparties, centralize execution with established operational capacity, and extend the suite of services available within a supervised environment.
  • Principal risks — notably, settlement-related counterparty credit risk and limited market risk in bona fide settlement defaults — are similar in nature to risks that banks already manage in analogous transactions.
  • State frameworks continue to develop and do not expressly prohibit such riskless principal activities.

Network Fees and De Minimis Crypto Balances

On November 18, 2025, the OCC issued Interpretive Letter 1186, confirming that national banks may hold limited amounts of cryptoassets on their balance sheets as principal where reasonably necessary to pay blockchain network fees (aka “gas fees”), and may pay such fees on blockchain networks to facilitate otherwise permissible activities. National banks may also hold amounts of cryptoassets as principal necessary to test otherwise permissible crypto platforms, whether internally developed or acquired from a third party (such as for providing cryptoasset custody services).

The OCC conducted its analysis under 12 C.F.R. § 7.1000(d)(1), which states that an activity is incidental to the business of banking “if it is convenient or useful to an activity that is specifically authorized for national banks or to an activity that is otherwise part of the business of banking.” In making such a determination, the OCC considered if the activity:

  • facilitates the production or delivery of a bank’s products or services, enhances the bank’s ability to sell or market its products or services, or improves the effectiveness or efficiency of the bank’s operations, in light of risks presented, innovations, strategies, techniques and new technologies for producing and delivering financial products and services; and
  • enables the bank to use capacity acquired for its banking operations or otherwise avoid economic loss or waste.

With respect to the first consideration, the OCC found that in light of “innovations, strategies, techniques and new technologies,” the proposed activities were analogous to “long-established bank practices with respect to payments.” In traditional payment systems, “banks typically need to invest some capital expenditure into building, joining, or maintaining the network, which may entail holding stock in the network or otherwise exposing the bank to the liabilities of the system. National banks have long been permitted to invest and hold ownership in these payments systems, even in cases in which the bank is exposed to liability for operational losses of the system.”

The OCC also stated that national banks have traditionally been permitted to hold assets as principal as a convenience to customers. This includes borrowing bank-ineligible securities from customers in order to engage in a securities-lending business and acquiring limited interests in private investment funds for which the bank serves as an investment adviser, in order to satisfy customer demand for compensation arrangements that align adviser and customer interests.

With respect to the second consideration, the OCC determined that the proposed activities would enable national banks to use the acquired capacity for their banking operations or to otherwise avoid economic loss or waste. According to the OCC, “[t]o the extent that a bank already has in place the operational capacity to provide for the purchase, sale, and holding of cryptoassets in the custody, stablecoin, or other permissible activity context, little additional operational requirements should be needed to acquire, hold, and pay cryptoassets associated with network fees. Requiring a bank to contract with a third-party network fee provider would necessarily result in costs that could otherwise be avoided by not relying on an intermediary.”

Finally, the OCC stated that holding cryptoassets as principal when necessary for testing otherwise permissible cryptoasset-related platforms is also an activity considered incidental to the business of banking. Such testing would allow national banks to confirm their ability to effectuate account transfers, trade execution and settlement, and recordkeeping, thus facilitating safe and sound operations and avoiding undue reliance on third parties that could compromise risk management.

Conditional Approval for Five National Trust Bank Charter Applications

The OCC’s conditional approval of five national trust bank charter applications — First National Digital Currency Bank; Ripple National Trust Bank; BitGo Bank & Trust, NA; Fidelity Digital Assets, NA; and Paxos Trust Company, NA — are the first such approvals since the agency granted conditional approval to Anchorage Digital Bank, Paxos National Trust, and Protego Trust Company in 2021. (Of these, only Anchorage Digital Bank satisfied the conditions to approval during the Biden administration.)

In granting its approval, the OCC stated that the entities will be subject to the same standards that apply to all conditional approvals and that if the entities satisfy the OCC’s conditions, they will join the approximately 60 other national trust banks that are currently supervised by the OCC.

The digital asset activities in which the five banks, collectively, would engage are broad. Certain of these activities were authorized under the so-called “bootstrap” provision of the National Bank Act, which permits a national trust bank to engage in any “other fiduciary capacity in which [s]tate banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located.” The permitted activities include:

  • Custody and safekeeping activities
  • Ancillary custody services such as settlement and clearing
  • Exchange, brokerage, and trading-related activities, including operating an exchange, trade execution, recordkeeping, valuation, tax services, and reporting services
  • Fiduciary agent, paying agent, and exchange agent
  • Wallet platform services
  • Transfer services for digital assets and fiat currency
  • Key management
  • Staking services
  • Escrow services
  • Collateral trustee and reserve management services
  • Stablecoin issuance
  • Issuance of gold-backed digital assets

The conditional approval letter for one of the conversion applications did note one impermissible activity that would need to be conformed within two years: obtaining digital assets as principal from customers who are permitted to pay receivable balances in either digital assets or fiat currency. In addition, upon conversion to a national trust bank, the entity would be required to convert any such digital assets received into fiat currency within one business day. 

In issuing the approval, the OCC set forth certain conditions, including that the banks generally must:

  • Only engage in those activities as represented in the application to the OCC
  • Limit their operations to those of a trust company, and ensuring those operations do not meet the definition of “bank” under Section 2(c)(1)-(2) of the Bank Holding Company Act
  • Conform, cease, or divest any proposed stablecoin issuance and redemption activities to comply with the GENIUS Act
  • Obtain the OCC’s written determination of no objection before marketing, issuing, or otherwise making available any bank-issued stablecoin
  • Give the Novel Bank Supervisory Office at least 60 days prior written notice of intent to significantly deviate or change from their business plan or operations, and obtain the OCC’s written determination of no objection before engaging in any such activity
  • Maintain a minimum prescribed amount of tier 1 capital
  • Maintain 180 days of operating expenses in eligible liquid assets1
  • Receive a letter of no objection from the OCC prior to the appointment of any individual to the position of “senior executive officer,” or the appointment of any individual to the board of directors

Some (but not all) of the conditional approvals require that the banks:

  • Adopt policies, practices, and procedures to ensure safe and sound operations, including those that establish and guide the operation of a robust BSA/AML/OFAC program
  • Implement a security program that complies with the “Interagency Guidelines Establishing Standards for Safeguarding Customer Information”
  • Engage an independent external auditor to perform an audit according to generally accepted auditing standards of sufficient scope to enable the auditor to render an opinion on the financial statements of the bank taken as a whole
  • Prepare financial statements on an accrual basis according to generally accepted accounting principles

The approval of national trust bank charters for digital asset entities has been a point of contention for some traditional financial institutions, which have argued that such charters permit only limited activities and that expanding their activities could lead to greater regulatory risk. The Bank Policy Institute, an advocacy group representing the US’s leading banks, issued a statement that is skeptical of the approval, noting that the decision “leaves substantial unanswered questions. Chiefly, whether the requirements the OCC has outlined for the applicants are appropriately tailored to the activities and risks in which the trust will engage.”

Practical Implications

With these actions, the OCC has clearly positioned itself as the favored bank regulator of digital assets. Under state “wild card” statutes, the activities allowed by the OCC may become permissible for state-chartered trust companies, depending on the state, but such trust companies will not benefit from federal preemption.

The conditional approvals, moreover, were granted quickly — less than six months from filing — and the OCC permitted the applicants to create required policies and procedures between conditional approval and the pre-opening examination. With the GENIUS Act being implemented in 2026, the trend toward national regulation will likely continue unabated.