The U.S. Office of the Comptroller of the Currency (OCC) has issued a pivotal interpretive letter on November 18, allowing national banks to hold native crypto assets and directly pay fees for blockchain network operations. This regulatory guidance may appear technical at first glance, but it significantly lowers barriers for banks to engage with public blockchain networks, opening avenues for activities such as staking and serving as validators.
Under the new regulations, outlined in Interpretive Letter 1186, banks can now own crypto assets necessary for transaction fees on distributed ledger technology (DLT) networks. Furthermore, they are permitted to acquire additional crypto assets for the purpose of testing various blockchain platforms, which may be developed internally or sourced from external providers. This development marks a substantial shift as it removes a key obstacle that previously hindered regulated banks from directly interacting with blockchain technology.
Importantly, the OCC”s guidance closely aligns with the operational requirements of proof-of-stake (PoS) validators. These validators are required to hold native tokens, process transactions, pay network fees, and earn rewards for their activities. The OCC characterizes these actions as essential to banking operations rather than speculative endeavors, framing them as extensions of traditional banking functions.
The OCC also highlights that banks may receive rewards in the form of network fees when they operate nodes, hinting at the potential for banks to participate as validators in blockchain networks. While the letter stops short of explicitly mentioning “staking,” the act of receiving rewards for operating nodes effectively encapsulates the role of a blockchain validator, thus narrowing the distinction between permissible banking activities and full validator participation.
In drawing parallels between blockchain infrastructure and longstanding payment systems, the OCC suggests that banks are already familiar with holding non-dollar assets like foreign currency reserves and network shares to facilitate settlements and meet customer needs. The letter argues that blockchain networks function similarly, necessitating the holding of native tokens to validate and settle transactions.
This interpretive letter, while presented as a clarification, could have far-reaching implications for the U.S. banking sector and its involvement in the crypto ecosystem. By enabling banks to hold native tokens, pay transaction fees, and operate nodes, the OCC creates a pathway for banks to engage more directly in blockchain consensus mechanisms. Such a shift could influence various facets of the crypto landscape, including decentralization, staking yields, and institutional access to blockchain infrastructure. Ultimately, this move signals a progressive regulatory environment where public blockchains and regulated financial institutions may work more closely than ever before.
