Bank of America enters crypto trading: Key differences between brokerage model and proprietary trading

【CoinDesk】The Office of the Comptroller of the Currency (OCC) recently issued an interpretive letter opening the door for nationwide banks to participate in crypto asset trading—clearly stating that banks engaging in riskless activities related to crypto trading are considered legitimate banking activities and can operate as trading intermediaries.

This policy has attracted industry attention. Jake, a senior executive at well-known OTC market maker Wintermute, offered a key insight: the process of bank participation in crypto trading fundamentally differs from traditional proprietary trading.

Specifically, the operational logic for banks is as follows—after purchasing crypto assets from clients, they immediately transfer the positions to liquidity providers (LPs). These seemingly simple two steps conceal some nuances. Technologically, banks only hold ownership of these assets within an extremely short window, with the sole purpose of completing trade matching. In other words, they do not actually stockpile inventory nor bear the risk of price fluctuations.

From an economic perspective, this model is a standard brokerage activity. Banks act as matchmakers—connecting buyers and sellers, charging commissions, but never holding positions or making autonomous trading decisions. This boundary is quite clear.