OCC Clarifies Banks May Hold Crypto Assets to Pay Blockchain Network Fees

The Office of the Comptroller of the Currency (OCC) issued new guidance this week that resolves a lingering operational question for banks in the crypto space: Can national banks hold crypto-assets specifically to pay blockchain network fees? The answer is yes, with appropriate safeguards.

This clarification removes a significant operational barrier that had prevented some banks from offering custody and other crypto-related services. Without the ability to hold small amounts of digital assets for transaction fees, banks could not effectively participate in blockchain networks on behalf of clients.

Key Metrics at a Glance

The Operational Challenge

Blockchain networks like Bitcoin and Ethereum require transaction fees to process and validate transactions. These fees are paid in the network's native cryptocurrency—Bitcoin requires BTC for fees, Ethereum requires ETH.

For banks offering custody services, this creates an operational necessity. When a bank holds crypto-assets for a client and the client wants to transfer those assets, the bank must pay the network fee. To do so, the bank needs to hold some amount of the crypto-asset specifically for this purpose.

The OCC's guidance clarifies that this operational necessity does not violate restrictions on banks' direct crypto investments. The crypto-assets held for fee payments are considered incidental to the custody service, not speculative investments.

The OCC's Reasoning

The OCC's interpretive letter emphasizes that banks have long held various assets for operational purposes. Just as banks hold cash for ATM operations and foreign currency for international transactions, they may hold crypto-assets for network fee payments.

The guidance establishes several key principles:

• Operational necessity: Crypto-assets must be held solely for paying network fees, not for investment or trading
• Segregated accounts: Fee reserves should be separated from other bank assets and clearly documented
• Limited exposure: Holdings should be limited to amounts reasonably necessary for fee payments
• Internal controls: Banks must establish policies governing fee reserve management

Competitive Implications

This clarification strengthens the competitive position of banks against crypto-native custodians. Institutions like Coinbase Custody and Anchorage have long offered fee management services. Traditional banks can now compete more directly.

The guidance is particularly relevant for:

• Custody services: Banks can now offer full-service custody including transaction execution
• Staking services: For proof-of-stake networks, banks can hold assets and pay network fees
• Institutional clients: Corporate treasuries and investment funds prefer bank-based custody

Risk Management Considerations

While the guidance expands permissible activities, it also emphasizes risk management. Banks must:

• Establish clear policies on fee reserve amounts and maximum exposures
• Monitor blockchain network fee volatility and adjust reserves accordingly
• Implement controls to prevent speculative accumulation of crypto-assets
• Document the relationship between fee reserves and client custody positions

TL;DR

• What: OCC confirms banks may hold crypto-assets to pay blockchain network fees
• Why: Operational necessity for custody and transaction services
• Key Limitation: Holdings must be incidental to services, not speculative investments
• Requirements: Segregated accounts, internal controls, BSA/AML compliance
• Impact: Enables banks to compete more effectively with crypto-native custodians

Sources

• OCC Interpretive Letters
• OCC Crypto-Asset Guidance
• Federal Reserve Supervision & Regulation

Filip Peshko is Senior Opinion Columnist & Blockchain Technology Analyst at TotesTek.