Jonathan Gould, Comptroller of the Currency, speaks at the Federal Reserve’s Integrated Review of the Capital Framework for Large Banks conference in Washington, DC, U.S., Tuesday, July 22, 2025. Treasury Secretary Scott Bessent offered his support to Jerome Powell amid regular attacks from Trump administration officials, saying he sees no reason for the Federal Reserve Chairman to resign. Photographer: Al Drago/Bloomberg
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The Office of the Comptroller of the Currency has taken an important step toward integrating blockchain activity into the regulated banking system. In Interpretive Letter 1186, the agency confirmed that domestic banks may hold small amounts of cryptoassets, not for trading or speculation, but to pay blockchain network fees (“gas fees”) related to otherwise permitted activities. The OCC also clarified that banks can hold a limited number of tokens to test digital asset platforms before launching them.
This is a narrow clarification on paper, but it addresses a practical bottleneck that has held back tokenization, digital asset custody, and blockchain-based settlement for years.
Why network fees have become a problem for banks
Each blockchain requires users to pay a fee, in the network’s own token, to validate or record a transaction. This is fundamental to the operation and protection of distributed ledger networks. But banks were in a bind: Without the authority to hold native tokens, they had to ask customers to provide them, purchasing small amounts before each transaction, or routing activity through a fee provider. Each of these workarounds created delays, pricing uncertainty, and counterparty risk.
The OCC directly acknowledged these operational drawbacks, noting that reliance on intermediaries “can add significant costs and risks.” The new letter removes this friction. Banks can now only hold amounts “reasonably necessary” to cover anticipated network fee needs, and these holdings must remain de minimis relative to capital.
A simple application of long-standing banking powers
The OCC defined this authority as an extension of, not a departure from, banks’ long-standing ancillary powers. Under 12 CFR § 7.1000(d)(1), an activity is permitted if it contributes to the provision of banking services, improves efficiency, or avoids waste. Paying mandatory network fees meets all of these criteria.
The letter places this clarification within the OCC’s broader digital assets framework, including previous guidance on crypto custody, stablecoin reserves, and the use of distributed ledgers for payments. It effectively removes a final operational constraint that prevented banks from implementing activities that the OCC deemed already authorized.
OCC paves the way for real blockchain testing
The OCC also addressed an issue that has quietly slowed banking development of digital asset platforms: the inability to test systems using native tokens. Banks cannot responsibly deploy custody, settlement or wallet infrastructure without validating transfers, controls, cybersecurity protections and compliance workflows. Requiring third parties to provide tokens for testing introduces costs and risks and effectively discourages extensive testing. The letter confirms that banks can hold the small amount of cryptoassets needed to test the systems securely.
This conclusion was supported by the applicant bank’s detailed risk and compliance program, which focused on controls over cybersecurity, illicit financing, liquidity, cryptographic protections and operational procedures.
A more transparent regulatory approach
In addition to releasing the interpretive letter, the OCC released information demonstrating how similar requests were evaluated, providing much-needed transparency in a historically opaque process. This gives institutions a clearer overview of supervisory expectations and signals a more open regulatory posture towards blockchain activity.
What this means for banks and fintechs
Although IL 1186 does not permit speculative crypto investment activities or holdings, it ultimately provides banks and their accompanying fintechs a convenient way to operate directly on blockchain networks.
For banks, the impact is considerable:
- Direct on-chain operations without intermediaries. Banks can now process transactions, reconcile internal wallets and support tokenized transfers without relying on fee providers or waiting for customers to provide the required tokens. This reduces latency and operational friction.
- More robust infrastructure for custody, settlement and tokenization. With access to native tokens, banks can control the final stage of on-chain activity, making blockchain-based securities transfers, programmable payments, and settlements more predictable and resilient.
- A clear monitoring framework. The OCC has set forth expectations regarding de minimis holdings, risk assessments, testing, and controls, providing banks with a stable compliance foundation for digital asset operations.
Fintechs also see significant advantages:
- Faster and more comprehensive product development. Fintechs can now test and launch on-chain products with their banking partners using real blockchain interactions, instead of relying on simulations or fragmented fee billing workflows.
- More banks are willing to support blockchain-based products. Clarity around gas fee management reduces a major point of hesitation for institutions, expanding the universe of banks positioned to support tokenization, stablecoin payments, digital asset custody, and distributed ledger settlement flows.
- Greater reliability and smoother customer experiences. Since banks can charge network fees on demand, fintech products built on banking rails can expect fewer failed transactions and more consistent settlement performance.
The road ahead
Interpretive Letter 1186 moves blockchain activity within the traditional banking perimeter in a practical and progressive manner. The OCC even noted that banks may hold crypto assets for other permitted purposes, such as seizing crypto collateral or hedging certain customer-focused derivative exposures, suggesting that additional clarifications may follow.
For now, banks and fintechs finally have the green light to create on-chain products without operational solutions. The conversation has moved beyond whether blockchain has a place in banking and is now focused on how quickly and compliantly institutions can deploy it.
