OCC confirms major news: Banks can directly provide crypto intermediary services to customers

Article by: 0xjs

The Office of the Comptroller of the Currency (OCC) in the United States issued Interpretive Letter #1188 on December 9, 2025, confirming that nationwide banks may participate in “riskless principal” transactions involving digital assets.

The OCC has issued Interpretive Letter #1188, confirming that national banks can engage in riskless principal crypto asset transactions as part of their banking activities. Such transactions involve the bank acting as an agent, facilitating crypto trades for one client while hedging with another client. The bank does not hold the crypto assets itself but acts similarly to a broker or agent.

This means banks can purchase crypto assets from one client and immediately resell to another client without holding inventory or bearing market risk, limited only to settlement risk. This model is similar to brokerage activities in traditional securities or foreign exchange markets and is considered a legitimate part of “banking business.”

This decision marks further acceptance by U.S. regulators of integrating cryptocurrencies rather than suppressing them.

Overall, it is a positive signal that can promote institutional adoption, but it also presents some potential challenges.

Key Positive Impacts

• Enhancing institutional liquidity and market depth: Banks can directly provide crypto trading intermediary services to clients, similar to Coinbase or Binance, but in a regulated manner. This will bring more institutional funds, narrow bid-ask spreads, and increase market liquidity, especially for mainstream assets like BTC, ETH, and stablecoins. It is expected that in Q1 2026, several banks will launch crypto trading platforms, further attracting large investors such as pension funds and corporate treasuries.
• Accelerating the integration of mainstream finance and crypto: This provides banks (e.g., JPMorgan, Bank of America) with a federal-level “safe harbor,” allowing them to process client orders without third-party exchanges. Previously, banks relied on platforms like Paxos or Coinbase Prime; now, they can build proprietary trading desks, pushing crypto from “speculative edge” to “core financial service.” This could stimulate a rise in crypto asset allocation in wealth management (some banks have already suggested 1-4%).
• Improving regulatory clarity and compliance appeal: OCC’s approval emphasizes that banks must comply with BSA/AML (Anti-Money Laundering) and risk management requirements, lowering entry barriers for institutions. It complements the OCC Letter #1186 from November 2025 (permitting banks to hold limited crypto assets for paying network fees), forming a complete framework. Industry analysts believe this will attract more compliant capital inflows and reduce “regulatory uncertainty” drag on the market.

Potential Challenges and Negative Impacts

• Centralization and review risks: Bank-led transaction flows could increase centralization within the crypto industry, making it easier for governments to intervene or freeze assets (e.g., targeting specific addresses). This contradicts DeFi’s decentralized ethos and may weaken smaller exchanges’ competitiveness, sparking community concerns about “Wall Street takeover.”
• Implementation hurdles: Despite federal approval, state-level banks still need local licenses (e.g., New York’s DFS license), and OCC requires strict security audits. In the short term, retail users may not see immediate benefits; more focus will be on institutional clients. Price volatility or settlement failures could still temporarily expose banks to market risks.
• Increased competition: Traditional banks entering the space will squeeze existing crypto exchanges’ market share; platforms like Coinbase will need to strengthen compliance to compete. However, this may also accelerate sector maturity and elevate overall standards.

Market Reaction and Outlook

Discussions on platforms like X show that the crypto community generally sees this as a “game changer,” emphasizing its potential to drive institutional adoption.

Bitcoin and Ethereum prices rose slightly after the announcement, reflecting market optimism.

In the long term, this could mark the “Crypto Banking Era” of 2025, with an estimated 10-20% of crypto trading volume mediated by banks by the end of 2026.

In summary, this decision reinforces cryptocurrencies’ status as legitimate assets and promotes their shift from the fringe to the mainstream, while cautioning against centralization risks. Investors should monitor future bank product launches and legislative developments to evaluate actual impacts.