Banks may engage in “riskless” principal crypto-asset transactions with and on behalf of their customers, according to an interpretive letter released Tuesday by the Office of the Comptroller of the Currency (OCC).
The letter, from the agency’s senior deputy comptroller and chief counsel to its senior deputy comptroller in the agency’s office for chartering, organization and structure, says that as described in its letter, conducting riskless principal crypto-asset transactions “is part of the business of banking and is permissible for a national bank.”
The letter points to recent applications in which several applicants have said they intend to engage in riskless principal crypto-asset transactions.
In the described “riskless” transaction, the letter states the intermediary – the bank – “does not enter into the transaction without also having entered into an immediate offsetting transaction,” with both transactions occurring “effectively simultaneously.”
“The intermediary does not hold any asset in inventory in connection with a riskless principal transaction except in rare circumstances, such as a bona fide settlement default (i.e., a situation in which the completion or settlement of one of the transactions does not occur as expected), in which case the asset is typically sold as soon as possible,” the letter states.
The intermediary here, it says, “assumes only nominal settlement, market, and credit risk, such as in the case of bona fide settlement default.”
The letter notes
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