- The OCC has allowed US national banks to hold native crypto-assets to pay blockchain network gas fees as part of permissible banking operations.
- Banks may retain crypto for both transactional use and internal testing, enabling them to run custody platforms smoothly without third-party intermediaries.
- Under the GENIUS Act, banks must manage risk carefully and only hold as much crypto as reasonably needed to support anticipated transactions.
US regulators have confirmed that national banks are permitted to hold cryptocurrency on their balance sheets to pay blockchain network fees, known as gas fees, for activities deemed part of normal banking operations. This confirmation by the Office of the Comptroller of the Currency (OCC) provides legal clarity for banks wishing to engage in crypto custody and related services without relying on third-party intermediaries.
Distributed Ledger Technology networks such as Ethereum require transaction fees to be paid in the network’s native token, with fees composed of a base amount and an additional tip to incentivise validators. Fees fluctuate depending on network demand, meaning banks must anticipate their needs to ensure seamless processing. Without the ability to hold the necessary tokens, banks could face higher costs, operational delays, or increased reliance on external providers.
The OCC guidance allows banks to retain crypto-assets as principal for both transactional and testing purposes. Banks developing or acquiring crypto-asset platforms may need to test transactions, recordkeeping, and compliance measures internally, which requires access to the native token to verify platform functionality. Such holdings enable banks to deliver custody services efficiently, ensuring clients can transact without interruptions.
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Legislation Enables Bank Crypto Use
The GENIUS Act, passed in July, supports these activities by establishing a framework for regulated stablecoins. Banks may now pay network fees as agents for customers or as part of custody operations while remaining compliant with federal law. Banks are expected to maintain robust risk and compliance procedures, covering operational, cybersecurity, liquidity, and legal risks, and to hold crypto only in amounts reasonably required for anticipated transactions.
Historically, national banks have facilitated client transactions by maintaining assets such as foreign currency or securities, and these precedents support the current approach to crypto-assets. By holding crypto to pay network fees, banks can ensure operational efficiency and meet client needs while continuing to uphold regulatory and safety standards.
Related: Tether Eyes US Institutional Launch Following GENIUS Act Approval
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