U.S. OCC approves virtual asset brokerage based on 'riskless principal'

The U.S. Office of the Comptroller of the Currency (OCC) has confirmed that national banks may act as brokers for virtual asset transactions using a 'riskless principal' structure. The action clarifies that allowing banks to intermediary transactions between customers without holding the assets themselves falls within the scope of traditional banking.

On the 9th (local time), Cointelegraph reported that in an interpretive letter the OCC stated a national bank may enter into a virtual asset purchase agreement with one customer while simultaneously entering into an offsetting transaction with another customer to perform a purely intermediary role. The OCC explained that the structure is the same riskless principal transaction method used in existing financial markets and can be applied to virtual assets.

The OCC said some applicant institutions had proposed that this approach could expand the range of services offered to customers. The letter noted that national banks would be able to provide virtual asset transactions through regulated financial institutions rather than unregulated platforms.

The letter also emphasized that institutions must independently determine whether virtual asset brokerage falls within their legal authority and that internal procedures are required to manage operational, compliance, and market risks. The OCC described the primary risks in a riskless principal structure as counterparty credit risk, particularly settlement risk.

The interpretive letter stated, based on section 24 of 12 U.S.C. § 24, that national banks have previously been able to enter into securities-based riskless principal transactions and that the structure can be applied even if virtual assets are not securities.

The OCC said the action responds to inquiries about the legal authority of banks seeking to handle virtual assets and that whether activities are permitted will be determined under existing laws and the scope of a bank's charter. The day before the letter's release, OCC head Jonathan Gould had explained that bank charter applications related to digital assets should be evaluated under the same standards as traditional financial institutions.