The Office of the Comptroller of the Currency has taken an important step toward bringing blockchain activity into the regulated banking system. In Interpretive Letter 1186, the agency confirmed that national banks may hold small amounts of crypto-assets, not for trading or speculation, but to pay blockchain network fees (“gas fees”) tied to otherwise permissible activities. The OCC also made clear that banks may hold limited tokens to test digital-asset platforms before launching them.
It’s a narrow clarification on paper, but it resolves a practical bottleneck that has held back tokenization, digital-asset custody, and blockchain-based settlement for years.
Why Network Fees Became a Problem for Banks
Every blockchain requires users to pay a fee, in the network’s own token, to validate or record a transaction. This is foundational to how distributed ledger networks function and protect themselves. But banks were in a bind: without the authority to hold native tokens, they had to ask customers to supply them, purchase small amounts before every transaction, or route activity through a fee provider. Each of these workarounds created timing delays, pricing uncertainty, and counterparty risk.
The OCC acknowledged these operational drawbacks directly, noting that reliance on intermediaries “can add costs and significant risks.” The new letter removes that friction. Banks may now hold only the amounts “reasonably necessary” to cover anticipated network-fee needs, and such holdings must remain de minimis relative to capital.
A Straightforward Application of Longstanding Bank Powers
The OCC framed this authority as an extension of longstanding incidental bank powers and not a departure from them. Under 12 C.F.R. § 7.1000(d)(1), an activity is permissible if it helps deliver bank services, improves efficiency, or avoids waste. Paying mandatory network fees satisfies all of these criteria.
The letter situates this clarification within the OCC’s broader digital-asset framework, including previous guidance on crypto custody, stablecoin reserves, and the use of distributed ledgers for payments. It effectively removes a final operational constraint that prevented banks from implementing activities the OCC already deemed permissible.
OCC Clears the Path for Real Blockchain Testing
The OCC also addressed an issue that has quietly slowed bank development of digital-asset platforms: the inability to test systems using native tokens. Banks cannot responsibly deploy custody, settlement, or wallet infrastructure without validating transfers, controls, cybersecurity safeguards, and compliance workflows. Requiring third parties to provide tokens for testing introduces cost and risk, and in practice discourages thorough testing. The letter confirms that banks may hold the small amount of crypto-assets required to test systems safely.
This finding was supported by the requesting bank’s detailed risk and compliance program, which emphasized controls across cybersecurity, illicit finance, liquidity, cryptographic protections, and operating procedures.
A More Transparent Regulatory Approach
In addition to issuing the interpretive letter, the OCC published information demonstrating how similar requests have been evaluated, providing much-needed transparency into a process that had historically been opaque. This gives institutions clearer insight into supervisory expectations and signals a more open regulatory posture toward blockchain activity.
What This Means for Banks and Fintechs
Although IL 1186 does not authorize investment activity or speculative crypto holdings, it finally gives banks and the fintechs that partner with them a practical way to operate directly on blockchain networks.
For banks, the impact is substantial:
- Direct on-chain operations without intermediaries. Banks can now process transactions, reconcile internal wallets, and support tokenized transfers without relying on fee providers or waiting for customers to supply the required tokens. This reduces latency and operational friction.
- A more robust infrastructure for custody, settlement, and tokenization. With access to native tokens, banks can control the final step in on-chain activity, making custody transfers, programmable payments, and blockchain-based settlement more predictable and resilient.
- A clear supervisory framework. The OCC has articulated expectations around de minimis holdings, risk assessments, testing, and controls—giving banks a stable compliance foundation for digital-asset operations.
Fintechs also see meaningful benefits:
- Faster and more complete product development. Fintechs can now test and launch on-chain products with their bank partners using real blockchain interactions, instead of relying on simulations or fragmented fee-sourcing workflows.
- More banks willing to support blockchain-powered products. The clarity around gas-fee handling reduces a major point of hesitation for institutions, expanding the universe of banks positioned to support tokenization, stablecoin payments, digital-asset custody, and distributed-ledger settlement flows.
- Greater reliability and smoother customer experiences. Because banks can source network fees on demand, fintech products built on bank rails can expect fewer failed transactions and more consistent settlement performance.
The Road Ahead
Interpretive Letter 1186 moves blockchain activity inside the traditional banking perimeter in a practical, incremental way. The OCC even noted that banks may hold crypto-assets for other permissible purposes, such as foreclosing on crypto collateral or hedging certain customer-driven derivative exposures, suggesting that additional clarifications may follow.
For now, banks and fintechs finally have the green light to build on-chain products without operational workarounds. The conversation has moved past whether blockchain has a place in banking and now centers on how quickly, and compliantly, institutions can roll it out.