- The OCC letter lets banks run riskless crypto trades with full supervisory oversight.
- New rules allow XRP settlement flows inside national banks for the first time.
- Ripple gains momentum as its bank-charter bid aligns with OCC’s updated framework.
The Office of the Comptroller of the Currency has opened a new chapter for U.S. banks by confirming that they may carry out riskless principal transactions involving crypto assets. The agency released the decision through Interpretive Letter 1188, a document that clarifies what banks can and cannot do as they move closer to blockchain-based financial activity.
OCC Confirms Bank Authority to Engage in Riskless Principal Crypto-Asset Transactions (Source: X)
The ruling may appear technical, but its impact is broad. It gives banks a regulated way to match customer crypto orders without taking positions themselves. The bank steps in as principal, immediately offsets the trade with another customer, and avoids holding any asset in inventory. Regulators stressed that this activity still requires strict safety standards, careful risk controls, and full compliance with federal law.
OCC: A Clearer Rulebook for Digital-Asset Use Inside Banks
This year has already seen several adjustments in how federal agencies approach digital assets. Earlier guidance allowed banks to provide custody services and handle certain stablecoin operations. Letter 1188 goes further by removing a major operational roadblock: banks may now use digital assets directly in settlement workflows and pay network fees on-chain.
The shift enables several new functions:
- Use of assets like XRP for payments and settlement within regulated banks
- Direct execution of blockchain network fees
- Custody of digital assets under established supervisory rules
- Technical links between banking systems and distributed-ledger networks
Regulatory analysts noted that the most significant change is the removal of reliance on third-party intermediaries. Banks can now plug into blockchain networks with a clearer legal footing, a detail that has kept many institutions on the sidelines in previous years.
Ripple’s Position Strengthens Under the New Framework
The timing of the OCC decision intersects directly with Ripple’s ongoing application for a National Bank Charter. If the application is approved, Ripple would fall under OCC supervision just like any other national bank or trust institution.
The letter’s implications for Ripple are straightforward:
- National banks now have clear permission to use XRP and RLUSD for settlement
- Ripple’s payment tools and XRPL infrastructure fit within the updated rulebook
- Banks can adopt distributed-ledger technology without separate service providers
- The clarity reduces legal uncertainty around using blockchain systems in regulated settings
Industry observers say it is the first time federal rules have so plainly aligned with how Ripple’s products are designed to function. While the interpretive letter applies across the banking sector, it lands at a pivotal moment for a company aiming to operate within the U.S. banking framework itself.
A Noticeable Shift From Earlier Restrictive Policies
For much of the early 2020s, banks faced strong discouragement from touching crypto assets at all. However, the tone began to soften in early 2025, and the latest interpretive letter signals a clear pivot toward structured participation rather than prohibition.
Even so, the OCC reminded banks that the ruling does not permit speculation, inventory-based positions, or broad risk-taking in digital assets. The agency repeated its baseline requirement: all crypto-related activity must be safe, sound, and thoroughly supervised.
Conclusion
Interpretive Letter 1188 marks a meaningful step in the long-running effort to define the role of digital assets inside the U.S. banking system. For Ripple, the moment arrives as the company seeks a national charter that would bring its payment and settlement tools under direct federal oversight. The OCC’s clarity does not guarantee adoption, but it removes one of the largest regulatory barriers standing in the way.
