The door to traditional finance is open: U.S. regulators have approved banks to directly participate in crypto transactions, ushering in a dramatic change in the market

The U.S. Office of the Comptroller of the Currency (OCC) issued Letter No. 1188, confirming that national banks can conduct “risk-neutral” cryptocurrency transactions. This means that banks can act as intermediaries while conducting offsetting transactions with buyers and sellers without holding cryptocurrency inventory.

This policy change is not an isolated incident but a systemic regulatory shift under the Trump administration’s pro-crypto stance. Previously, the OCC had allowed banks to provide crypto asset custody and execution services without prior approval in May 2025.

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01 Regulatory turn

U.S. banking regulatory policy is undergoing a silent revolution. On November 18, 2025, the U.S. Office of the Comptroller of the Currency confirmed by issuing Explanatory Letter No. 1186 that banks can hold the necessary amount of crypto assets to pay for blockchain network fees.

This shift contrasts with the regulatory stance during the Biden administration, when regulators explicitly discouraged banks from venturing into the crypto asset space.

Just three weeks later, the OCC further issued Interpretation Letter No. 1188, explicitly allowing banks to engage in “risk-neutral” cryptocurrency transactions. In this trading model, the bank acts as an intermediary while conducting offsetting transactions with buyers and sellers without holding cryptocurrency inventory.

02 Trading Mechanism

Under the new rules, Bank of America is allowed to participate in cryptocurrency transactions as an intermediary, a business model known as “risk-neutral entity” trading. In this framework, banks will act as brokers, buying crypto assets from one party while selling them to another.

Banks largely do not hold crypto assets in this process, except in exceptional circumstances. The OCC emphasizes that banks must conduct these activities in a safe and sound manner and comply with applicable laws.

For banks, this new policy solves long-standing operational problems. In the past, banks had to rely on third parties to pay gas fees or adopt off-chain workarounds due to the lack of explicit authorization to hold native crypto assets when conducting on-chain business.

03 Double Impact

This regulatory change is having a dual impact on both the traditional banking and crypto industries. For banks, the new regulations remove key obstacles to stablecoin custody and tokenized deposits.

The banking industry is facing structural adjustments. The OCC only regulates national banks, while the Federal Reserve still lists cryptocurrencies as “unsafe and unstable” major assets, leading to policy disagreements among state member banks.

The crypto industry has ushered in unprecedented opportunities for institutional participation. This increased regulatory clarity lowers the barrier to entry for traditional financial institutions into the digital asset market. As more institutional investors enter the market, market liquidity and stability are expected to increase.

04 Limitations and Challenges

Despite the easing of the regulatory environment, banks still face multiple restrictions and challenges in the field of crypto assets. The new regulations clarify that banks’ holdings of crypto assets must be strictly used for operational needs, prohibiting unrestricted speculation or investment assets.

Banks must comply with strict risk management requirements, including routine risk control measures such as market risk, liquidity management and anti-money laundering. At the same time, the price fluctuations of tokens such as Bitcoin and Ethereum may affect the stability of bank balance sheets.

Capital adequacy ratio has become a key threshold for banks to participate in crypto business. According to the Federal Deposit Insurance Corporation (FDIC), banks are required to meet higher capital standards to participate in crypto activities.

05 New market pattern

This shift in U.S. regulatory policy marks a significant milestone in the traditional financial system’s embrace of on-chain operations. With the improvement of regulatory frameworks, the crypto industry is shifting from technology-driven to institutional and technological two-wheel drive.

The relationship between banks and cryptocurrency exchanges may shift from competition to cooperation and complementarity. Banks can tap into their large customer base and regulatory trust, while exchanges can provide technical expertise and liquidity depth.

For investors, this change means more diverse access to crypto assets and greater security. The involvement of banks will increase market acceptance and recognition of cryptocurrencies, attracting more investors to the market.

As major U.S. regulators issue detailed compliance guidelines for crypto asset custody, stablecoin reserves, and token disclosure, the industry is moving towards transparency and institutional consolidation.

Future Outlook

As of December 10, the prices of mainstream crypto assets on the Gate exchange showed a positive trend, with Bitcoin trading at $92,658 and Ethereum trading at $3,319.

With the Bank of America approved to enter the crypto trading space, the convergence of traditional finance and digital assets has entered the fast lane. This regulatory policy-driven change is reshaping the boundaries of the financial system, and ordinary investors will gain unprecedented asset allocation opportunities in the process.

As Wall Street capital begins to flow into the crypto market through the banking system, the foundation for the next bull run may have been quietly laid in regulatory documents.