OCC says banks can hold certain cryptocurrencies to pay gas fees in latest guidance

Banks can pay gas fees and hold cryptocurrency needed to pay those network fees, according to a new letter from the Treasury Department’s Office of the Comptroller of the Currency.

The OCC, which oversees banks, said banks may have to pay network fees as part of doing business and hold crypto on balance sheets to pay those fees, in its Interpretive Letter 1186 on Tuesday.

“We confirm that the proposed activities, as described and qualified by the Bank, are permissible,” the OCC said in the letter.

The OCC referred to Ethereum as an example, saying that the Ethereum network requires transactions to be denominated in ETH.

“Such a user would have to either maintain a separate ETH account, conduct a spot transaction on a crypto-asset exchange to obtain ETH prior to the transaction, engage with a third-party network fee-provider, or obtain ETH by some other method,” the OCC said. “This process can add costs and significant risks, including those related to operational complexity, asset price changes, and delayed transactions.”

Updating crypto guidance

Over the past year under the Trump administration, regulatory agencies, including the OCC, have shifted their stance toward crypto.

The Federal Reserve has since withdrawn guidance that previously discouraged banks from participating in crypto.

The central bank has also, along with the OCC, released a joint statement over the summer setting out how existing rules apply to banks holding crypto on customers’ behalf, among other moves.

The OCC has also clarified that U.S banks can buy and sell crypto assets on their behalf. The bureau also said it was removing references to reputation risk from its handbooks and guidance, though it noted that it would not change its expectation on how banks handle risks.