US Regulator Greenlights Banks Holding Cryptocurrency for Blockchain Transaction Fees

In a landmark move, the Office of the Comptroller of the Currency (OCC), a bureau of the U.S. Department of the Treasury, has issued new interpretive guidance confirming that banks can legally hold cryptocurrencies to cover blockchain network transaction fees, commonly known as “Gas Fees,” as part of their routine business operations.

OCC Provides Clarity for Digital Asset Operations

The guidance, detailed in Interpretive Letter No. 1186, released on Tuesday, clarifies that financial institutions are permitted to hold the necessary digital assets on their balance sheets when conducting business that requires payment of blockchain network fees. This ensures banks can efficiently meet their obligations in the evolving digital landscape.

The OCC’s letter explicitly states: “We confirm that the business activities described and self-defined by banks are permitted.” This affirmation provides a crucial regulatory green light for banks looking to integrate blockchain technology more deeply into their services.

Streamlining Blockchain Transactions and Mitigating Risks

To illustrate the practical implications, the OCC offered a compelling example: A bank executing a transaction on the Ethereum blockchain would require a certain amount of Ether (ETH) to pay the associated Gas fees. Without the ability to directly hold ETH, banks would face significant operational hurdles. These could include maintaining separate Ether accounts, engaging in last-minute spot purchases via exchanges before each transaction, or relying heavily on third-party service providers.

Such indirect processes, the OCC highlighted, would not only inflate operational costs but also introduce considerable complexity, expose banks to asset price volatility risks, and cause transaction delays. By allowing direct ownership of cryptocurrencies for on-chain transaction fees, the OCC’s ruling effectively addresses these pain points, fostering greater efficiency and security for financial institutions operating with digital assets.

A Shifting Regulatory Tide for Digital Assets in the US

This latest guidance underscores a broader and rapid transformation in the stance of US financial regulators toward crypto assets, particularly evident over the past year under the Trump administration. What was once characterized by caution, and even outright reluctance, has steadily evolved into a more open and formalized regulatory framework.

The Federal Reserve (Fed) recently rescinded earlier guidance that had actively “discouraged” banks from engaging in cryptocurrency-related activities. This was followed by a joint statement from the Fed and the OCC earlier this summer, which reiterated how existing regulations apply to scenarios such as banks providing custody services for clients’ crypto assets.

Furthermore, in May of this year, the OCC had already indicated that US banks could facilitate the buying and selling of crypto assets on behalf of clients. It also permitted the outsourcing of crypto asset custody and transaction execution services to specialized third-party institutions. This earlier move granted banks greater flexibility and scope for development in their cryptocurrency dealings, contingent upon the establishment of robust risk management mechanisms.