Banks Can Hold Crypto ‘As Principal’ for Network Fees

• OCC now permits banks to hold crypto exclusively for blockchain network fee payments.
• Policy strengthens regulated integration of blockchain settlement within US banks.
• Stablecoin adoption pressures banks to modernize rails and protect deposit bases.

The Office of the Comptroller of the Currency issued updated guidance on Tuesday allowing federally chartered banks to hold crypto-assets as ‘principal,’ solely to pay blockchain network fees. 

The ‘Gas’ Rule: Why Banks Need to Hold Crypto as Principal

The new framework lets banks hold limited crypto balances required for on-chain transactions while operating under strict supervisory controls. The OCC previously allowed institutions to run blockchain nodes and use distributed ledgers to streamline settlement, forming the foundation for this latest step.

Banks have intensified calls for clarity as stablecoin networks attract transaction volume once routed through ACH and card payment channels. Treasury officials warn that stablecoin rails threaten deposit balances, pushing banks to integrate blockchain settlement to retain corporate clients migrating toward tokenized systems.

The policy reflects growing institutional demand for tokenized settlement systems, private blockchain deployments, and integrated cross-border clearing processes.

The OCC stressed the need for robust operational controls, including audit trails, liquidity buffers, cybersecurity protections, and chain-specific risk assessment frameworks. Regulators will monitor banks’ exposure to network congestion, protocol volatility, and third-party operational dependencies.

As stablecoin adoption accelerates, US-based financial institutions have entered a race to adopt blockchain solutions without ceding more market share major players, Tether (USDT) and Circle (USDC). 

Market Impact: Banks Move Closer to Tokenized Settlement as Regulation Tightens

The OCC’s guidance arrives as US banks confront the fastest shift in deposit behavior since the post-pandemic tightening cycle. Stablecoin volumes on major networks have surged, prompting corporate treasurers to bypass traditional settlement systems for faster, programmable transfers. Banks risk losing core transaction revenue unless they adopt compatible on-chain infrastructure.

The new rule provides regulatory cover for institutions exploring blockchain settlements for trade finance, repo markets, and intraday liquidity optimization. Custody of network fees allows banks to test tokenized workflows without assuming balance-sheet exposure to volatile digital assets. It also sets a precedent for future guidance enabling broader tokenized payment activity.

Investor sentiment toward regulated digital asset adoption may strengthen as major institutions move from pilot tests to operational deployments. Fee-based custody could open the door to regulated stablecoin issuance, bank-run node infrastructure, and on-chain collateral markets.

The policy also positions banks to compete with stablecoin issuers that dominate retail and cross-border payment channels. By authorizing fee custody, the OCC effectively removes a key operational bottleneck that limits banks’ ability to transact on public chains.

Banks now face rising expectations to integrate tokenized settlement in the coming year amid increased demand for instant financial transactions. The guidance also moves US institutions closer to deploying blockchain-enabled liquidity management systems under Federal government oversight.