Briefing
The Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1186, formally clarifying that national banks and federal savings associations may hold native blockchain tokens on their balance sheets when required to pay network fees for authorized activities. This action immediately resolves a critical operational bottleneck, allowing banks to directly engage with public blockchain infrastructure for customer-facing services without relying on complex third-party intermediaries for gas payments. The consequence is a definitive regulatory green light for institutional engagement, contingent on banks implementing comprehensive controls across technology risk, cybersecurity, and illicit finance, specifically requiring a demonstration of institutional-grade compliance programs before holding digital assets.
Context
Prior to this guidance, the existing regulatory framework permitted banks to offer digital asset custody and stablecoin facilitation services, but a critical legal ambiguity persisted regarding the holding of native tokens (like Ether or Solana) required to pay the “gas” fees for on-chain operations. This lack of clarity forced regulated entities to devise inefficient, complex workarounds → such as relying on external vendors or conducting near-instantaneous spot exchanges → to manage the infrastructure cost of blockchain transactions, thereby creating operational risk and stifling the development of scalable, in-house digital asset services.
Analysis
This Interpretive Letter directly alters the operational and compliance frameworks for banks pursuing digital asset strategies. The cause-and-effect chain is clear → the removal of the operational barrier (inability to hold gas tokens) now mandates a corresponding upgrade to the bank’s risk management architecture. Specifically, banks must integrate robust controls for investigating asset provenance, screening transactions against sanctions lists, and identifying exposure to illicit activity before accepting deposits or processing transfers.
This move shifts the focus from legal permissibility to the quality of the bank’s internal compliance technology and governance structure. The guidance requires banks to manage technology risk, operational risk, cybersecurity, liquidity, and illicit finance as core components of their digital asset holding program.
Parameters
- Regulatory Instrument → Interpretive Letter 1186 (OCC)
- Asset Type Authorized → Native Blockchain Tokens (e.g. ETH, SOL)
- Authorized Purpose → Network Fee Payments (Gas) and Platform Testing
- Compliance Mandate → Institutional-Grade Compliance Program
Outlook
The OCC’s action sets a strong precedent for other US banking regulators by framing the holding of native tokens as an essential, authorized infrastructure requirement, which is likely to accelerate the internal development of tokenization and digital asset custody services within the banking sector. The next phase will involve the industry demonstrating the effectiveness of its newly integrated risk controls, with potential future guidance focusing on capital treatment for these on-balance-sheet digital assets. This move positions regulated US banks to better compete with specialized digital asset custodians and could encourage similar operational clarity from international banking supervisors.
Verdict
The OCC’s operational clarity on native token holding solidifies the foundation for traditional finance institutions to securely and scalably integrate public blockchain infrastructure, marking a decisive step toward digital asset mainstreaming.
