BlockRiver Blog | OCC Clears Banks to Hold Crypto for Network Fees — The Compliance Fog Over Stablecoin Settlement Is Lifting

For years, the practical question blocking most bank stablecoin pilots wasn't whether the technology worked. It was whether touching it—operationally, not just theoretically—would trigger regulatory exposure no compliance officer could justify. The OCC's Interpretive Letter 1186, published in November 2025, provides a direct answer.

The letter confirms that national banks may pay network fees on blockchain networks to facilitate otherwise permissible activities and hold, as principal, amounts of crypto-assets necessary to pay network fees for which the bank anticipates a reasonably foreseeable need. Banks may also hold crypto-assets as principal for testing otherwise permissible crypto-asset-related platforms, whether internally developed or acquired from third parties.

This matters because blockchain infrastructure doesn't operate like traditional rails. Every on-chain transaction—custody transfers, settlement, reconciliation—requires the payment of gas fees in a network's native token. Many blockchain networks require fees to be paid in their native token, regardless of which asset is being transacted. Without the ability to hold these tokens, banks would face practical bottlenecks: delays in processing customer transactions, reliance on third-party fee providers, or the need to conduct spot exchanges before each blockchain operation.

Prior to this guidance, banks had the regulatory authority to offer custody and settlement services on-chain but lacked explicit permission to hold the tokens required to execute those services. Banks exploring blockchain-based settlement, tokenization or custody products previously faced an operational gap: they had the regulatory authority to offer certain services but lacked clear permission to hold the tokens necessary to operate the underlying infrastructure. That gap is now closed.

The timing is not accidental. The OCC issued Interpretive Letter 1183 on March 7, 2025, rescinding Interpretive Letter 1179—the 2021 guidance that had required banks to obtain written supervisory non-objection before engaging in any crypto-asset activity. The OCC determined the rescinded letter was "no longer necessary" based on supervisory experience since its issuance in November 2021. As a result, national banks may engage in certain crypto-asset activities without first obtaining written supervisory non-objection.

The earlier regime had functioned as a de facto prohibition. Of the 21 supervisory non-objection requests submitted between November 2021 and March 2025, nine were granted. Eight of those involved internal blockchain use only. Most of the remaining requests were withdrawn by applicants in the face of agency resistance to expanded digital asset activities.

The regulatory posture has shifted comprehensively. President Trump signed the GENIUS Act into law in July 2025, creating the first federal regulatory system for stablecoins. The legislation requires 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and mandates monthly public disclosures of reserve composition. Comptroller Jonathan Gould applauded the Act, stating that the OCC is "prepared to work swiftly to implement this landmark legislation."

The OCC has followed through on that commitment. In December 2025, the agency conditionally approved five national trust bank charter applications. Subject to meeting conditions, these institutions will join approximately 60 other national trust banks supervised by the OCC. The approvals include de novo charters for First National Digital Currency Bank and Ripple National Trust Bank, as well as conversions from state trust companies for BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company.

The OCC also published Interpretive Letter 1188 in December 2025, confirming that national banks may engage in riskless principal crypto-asset transactions as part of the business of banking. Such transactions involve a bank acting as principal in a crypto-asset transaction with one customer while simultaneously entering into an offsetting transaction with another customer. The bank serves as an intermediary and does not hold the crypto-assets in inventory.

Taken together, the interpretive letters, charter approvals, and stablecoin legislation form a coherent framework. Banks can custody digital assets. They can hold reserves backing stablecoins. They can operate nodes on distributed ledger networks. They can pay gas fees and test platforms. And now they can execute transactions on behalf of customers without retaining market exposure.

For a regional bank's payments innovation team, this changes the operating environment materially. The question is no longer whether stablecoin settlement is legally permissible—it is. The question is how to operationalize it.

The OCC's guidance opens the door for banks to perform core crypto-related operations more effectively. This includes streamlining custody transfers, on-chain reconciliation, and settlement; reducing reliance on third-party fee providers; operating nodes consistent with safe practices; and conducting robust pre-production testing of wallets, security, and compliance controls.

But the operational complexity remains substantial. The OCC requires banks to conduct comprehensive risk and compliance assessments before engaging in these activities. These assessments must cover technology risk, operational risk, cybersecurity risk, liquidity risk, and illicit finance risk. Banks must maintain appropriate controls for cryptographic security, governance procedures, and third-party oversight.

Most mid-tier banks lack the internal infrastructure to manage native token holdings, on-chain custody operations, and the associated compliance architecture. The regulatory path is now clear; the execution path requires either building that capability from scratch or partnering with infrastructure providers who have already done so.

The competitive window is open. As one legal analysis noted, "the environment has never been more favorable for existing banking organizations launching a digital asset business." Banks that waited for regulatory clarity now have it. Those that continue to wait will find themselves competing against institutions that moved first—and against native digital-asset firms that just received federal charters.

The question for heads of payments innovation is no longer "can we do this?" but "how do we do this without building crypto infrastructure expertise that isn't core to our business?" The OCC has provided the permission structure. What remains is execution.