OCC Allows Banks to Hold Crypto for Gas Fees — Operational Playbook for Custodians & Treasuries

Why the OCC update matters now

In late 2024–2025 the Office of the Comptroller of the Currency (OCC) clarified that federally chartered banks can hold cryptocurrency to pay network fees — a seemingly narrow permission but one with broad operational implications. At the surface this is about enabling banks and their clients to execute on-chain transactions without relying on third-party fee mechanics; underneath it’s a nod toward integrating native asset operations into mainstream banking infrastructure. Coverage summarizing the change and its scope is available in industry reporting, which is useful background for treasury and custody teams planning next steps (Blockonomi coverage of the OCC change).

This guidance affects two related but distinct groups: custodians operating wallets and settlement rails, and corporate treasuries that may elect to hold BTC or ETH (or other tokens) as working balances or reserves. The distinction is important — custodians typically promise operational continuity and segregation, while treasuries focus on liquidity, accounting and counterparty selection.

What the guidance allows — and what it doesn’t

The OCC guidance is targeted: it approves banks holding native tokens to cover transaction costs (i.e., gas fees on Ethereum or miner/relay fees on Bitcoin). It is not a blanket endorsement to underwrite trading, custody of speculative holdings without appropriate governance, or to run unregulated custodian services without supervision. Banks will still be examined on safety, soundness and compliance controls.

Operationally, this means a bank treasury can maintain small operational balances of ETH to fund smart contract interactions, DeFi settlements or client transactions. For many institutions, this will also introduce questions about custody architecture: where should those native tokens live (hot pools, segregated hot wallets, or with an external institutional custodian)?

Practical gas management solutions for banks and treasuries

Banks and treasuries need repeatable, auditable ways to ensure on-chain operations don’t fail for lack of fees. Below are practical patterns and trade-offs.

Hot-wallet pools with strict limits and segregation

A common approach is to host minimal hot-wallet pools for operational transactions, with clear policy limits on exposure and automated top-ups from cold storage. Hot pools allow rapid fee payments and withdrawals while cold storage retains larger balances offline. Controls should include multi-party signing, threshold limits and real-time monitoring.

Automated top-up and fee estimation

Integrate fee oracles and dynamic gas estimators to avoid overfunding (which increases custody exposure) or underfunding (which causes failed transactions). Use automated workflows that trigger top-ups only when balances fall below a pre-set threshold, with approvals for larger replenishments. Audit logs for these triggers are crucial for examiners.

Relayers, meta-transactions and fee abstraction

Where possible, use fee-relayer services or account abstraction patterns (e.g., EIP-4337 style solutions) to reduce the need to hold native ETH for every operational address. Relayers can sponsor gas fees and invoice the treasury in fiat or stablecoins. This shifts counterparty risk to relayer providers and must be reflected in contracts and contingency plans.

Layer-2s and alternative fee strategies

Moving operations to L2s or rollups can drastically cut gas costs and simplify fee forecasting — but it introduces new custody and liquidity considerations. Treasuries should model expected throughput, settlement frequency and bridging costs before committing reserves to an L2.

BTC vs ETH: operational differences

While both BTC and ETH necessitate on-chain fees, their operational models differ. BTC fees are tied to UTXO models and typically require consolidations; ETH gas is consumed per transaction and smart contract complexity. Treasuries should design separate workflows and reconciliation logic for each asset class.

Custodians, counterparty risk and the SharpLink example

One immediate industry effect of the OCC memo is increased demand for reputable custodians that can hold native tokens with strong operational controls. A recent corporate example is SharpLink moving ETH to Galaxy Digital — a public company shifting its reserves to an institutional custodian, highlighting priorities such as insured custody, operational SLAs and regulatory comfort (BeinCrypto on SharpLink's ETH move).

SharpLink’s transfer is illustrative rather than unique. Corporates holding ETH as part of treasury reserves will weigh: custody insurance, on-chain withdrawal controls, proof-of-reserves transparency, and the custodian’s ability to handle on-chain fee flows cleanly. For many, outsourcing the custody and operational responsibility for hot-fee balances to an institutional custodian is a sensible risk-reduction move.

Evaluating custodians: controls and contractual protections

When assessing custodians, treasuries should request and verify:

• SOC 1 / SOC 2 reports and independent audit evidence
• Insurance limits and exclusions (cyber vs operational fraud coverage)
• Proof-of-reserves practice and frequency
• Incident response timelines and SLA commitments for hot-wallet replenishment
• Fee handling policies and reconciliation cadence

Contracts should codify responsibilities for on-chain fee failures, reconciliations, and remediation workflows. Custody agreements must explicitly address who bears settlement losses from mis-sent gas, replay attacks, or chain reorganizations.

Accounting, compliance and examiner expectations

Bringing native token operations into a bank or corporate treasury lifecycle triggers multiple reporting and compliance updates.

AML, sanctions screening and transaction monitoring

Banks must apply AML/KYC and OFAC screening to recipients and counterparties of on-chain transactions, and instrument transaction monitoring rules to flag suspicious patterns. On-chain analytics tools can enrich screening but require integration and tuning to reduce false positives.

Audit trails, reconciliations and examiner-ready documentation

The OCC — and examiners broadly — will expect robust audit trails showing policy authorizations, automated top-up events, wallet movement logs and reconciliation between custody records and on-chain state. Build standardized exports and dashboards that demonstrate controls in place.

Accounting and tax treatment

Banks and corporates must decide on accounting classifications (cash-equivalent vs intangible asset, depending on jurisdiction and current guidance) and ensure gas payments and network fees are captured correctly as operating expenses. Reconciliation between fiat invoices and token movements must be audit-grade.

Reporting for banks: exam prep and governance

For banks specifically, governance documents should be updated to reflect the new capability: board approvals, delegated authorities, operational limits, and incident escalation matrices. Expect examiners to probe stress tests, contingency plans and third-party risk reviews.

Operational checklist: an actionable playbook

Below is a condensed checklist treasury and custody teams can adapt into formal playbooks:

• Establish policy: define permitted tokens, fee thresholds, and approval workflows.
• Segregation: separate hot fee pools from client custody and cold reserves.
• Custodian selection: validate SOC reports, insurance, proof-of-reserves and SLAs.
• Automation: deploy fee oracles, dynamic top-ups, and monitoring alerts.
• Relayer strategy: evaluate fee-relayers and account abstraction to minimize native holdings.
• Compliance: integrate AML/OFAC screening and on-chain analytics into transaction monitoring.
• Accounting: define treatment of native holdings and gas payments; standardize reconciliation.
• Testing: run failure scenarios, chain reorg tests and withdrawal drills.
• Documentation: create examiner-ready playbooks and audit logs.
• Supplier risk: include contingency plans for custodian outages or relayer failures.

This checklist balances the technical minutiae with governance and third-party management that examiners will expect.

Strategic implications and next steps

The OCC’s guidance nudges banks and treasuries from can we to how do we when it comes to native asset operations. Institutions that act now to create robust operational playbooks will be better positioned to offer integrated services, support corporate clients holding reserves, and participate in emerging on-chain settlement rails.

SharpLink’s move to Galaxy Digital demonstrates a pragmatic corporate posture: custody should be managed by providers that can combine insurance, operational controls and regulatory comfort. That doesn’t necessarily rule out bank custody — but it raises the bar for banks to match institutional custodians’ technical readiness.

For treasury teams preparing playbooks, start with governance and risk tolerance, then layer technology and counterparty controls. Tools and partners (including platforms that bridge custody and operational needs like Bitlet.app) will matter, but they’re only as good as the policy and auditability that underlie them.

Conclusion

The OCC update is more than an operational tweak — it’s an invitation for banks and corporate treasuries to build responsible on-chain capabilities. Managing gas fees, choosing custody partners, and hardening compliance and accounting workflows should be treated as a coordinated program, not an ad-hoc technical fix. Firms that prepare examiner-ready playbooks and pick custodians carefully (as SharpLink did) will reduce counterparty risk and operational friction while staying aligned with regulatory expectations.

For treasury and custody teams: start with policy, stress-test your operational assumptions, and codify who signs off on every class of on-chain fee event. That discipline pays dividends in audits, client confidence and operational resilience.