Banks Gain a Clearer Path Into Blockchain Infrastructure After New OCC Guidance

For years, banks have circled blockchain cautiously—launching pilots, commissioning reports, and partnering with fintech firms while waiting for regulators to define the limits of what they can and cannot do. With the Office of the Comptroller of the Currency’s new Interpretive Letter 1186, regulators have finally drawn a clearer perimeter: banks may hold crypto—but strictly for operational purposes tied to permitted banking activities.

Operational Crypto, Not Speculative Crypto

Earlier this week, the OCC confirmed that national banks and federal savings associations may hold crypto-assets as principal on their balance sheets when those assets are necessary to support legitimate banking functions. This includes holding small amounts of digital assets to pay blockchain network fees, operating tokenized deposit platforms, or testing blockchain-based settlement systems.

The guidance does not greenlight speculative crypto trading desks or investment activity. Instead, it opens a narrow but meaningful corridor for institutions to run blockchain infrastructure without regulatory ambiguity.

From Theory to Practical Use

For many banks, blockchain initiatives have been stuck in the conceptual phase. Institutions exploring tokenized deposits or real-time settlement often hit the same barrier: they could not legally hold the digital “fuel” required to operate or test the rails they were designing.

The OCC’s new interpretation removes that bottleneck. Banks can now hold limited amounts of crypto exclusively to facilitate operational, testing, and settlement tasks. This shift marks a transition from the speculative side of crypto to the utility-driven side—enabling pilots in blockchain-based settlement, programmable payments, interoperability testing, smart-contract workflows, and on-chain identity verification.

Regulatory clarity becomes a catalyst, giving cautious institutions the confidence to move forward with experimentation.

What It Means for Banks

Most banks are nowhere near tokenizing their balance sheets, but they now have a clear route to modernize the infrastructure behind core services. With the ability to hold operational crypto, institutions can test tokenized deposits, blockchain-based settlement, and programmable treasury flows without navigating regulatory uncertainty.

Even with this flexibility, traditional expectations remain unchanged. Safety and soundness, custody controls, vendor oversight, and AML/KYC compliance continue to govern all activity. Banks that pair technical pilots with strong risk frameworks will have a significant advantage as the ecosystem matures.

The guidance also shifts the vendor landscape. Banks experimenting with operational blockchain tools will increasingly seek fintech partners who offer secure custody, gas-fee management, token-agnostic architecture, and audit-ready transparency.

What It Means for Fintech Firms

For fintech companies working on tokenization, settlement technology, compliance infrastructure, or on/off-chain connectivity, the OCC’s decision opens a meaningful door. The inability of banks to hold even minimal crypto assets has long slowed adoption; removing that barrier allows fintechs to move discussions from theoretical benefits to actual implementation.

But success will require fintechs to deliver bank-grade architecture: detailed audit trails, strict separation of operational and speculative assets, and supervisory-aligned token-handling practices. Institutions will gravitate toward partners that can demonstrate measurable improvements in speed, treasury efficiency, or operational cost.

A New Phase of Blockchain Modernization

Interpretive Letter 1186 does not answer every regulatory question surrounding digital assets, but it eliminates one of the most practical obstacles to blockchain-based banking infrastructure: the ability to use the crypto necessary to make these systems work. Banks do not need to speculate on digital assets to benefit from them—they simply need the operational flexibility to run modern rails.

With that flexibility now granted, banks and fintechs alike have an opportunity to advance within a clearer, more defined regulatory environment.