tl;dr
US banking groups have urged the Office of the Comptroller of the Currency (OCC) to delay decisions on crypto companies’ applications for national bank licenses, citing insufficient public information and concerns that approving these charters would represent a major policy shift. They argue that cr...
US banking groups have urged the country’s banking watchdog to postpone its decision on crypto companies’ bank licenses until more details about their plans are public, claiming that allowing the bids would be “a fundamental departure” from current policy. The American Bankers Association and other bank and credit union trade groups said in a letter to the Office of the Comptroller of the Currency (OCC) on Thursday that its approval of national bank charters for firms like stablecoin issuers Circle Internet Group and Ripple Labs “would raise significant policy and process concerns.”
The groups argued that significant policy and legal questions arise as to whether the applicants’ business plans involve the fiduciary activities traditionally performed by national trust banks. Crypto firms such as Circle, Ripple, and Fidelity Digital Assets have recently applied for banking licenses with the OCC, which would allow them to operate as banks, settle payments faster, and be regulated federally across all states.
Banking groups have requested the OCC to delay its decisions on these charter applications, stating that current public information in the applications is insufficient for meaningful public assessment or comment. They also emphasized that approving these charters would be a departure from long-standing policy, as the business models proposed by crypto companies lack the fiduciary activities characteristic of traditional national trust banks.
The letter highlighted that providing custodial services for digital assets does not qualify as a fiduciary activity. Granting charters without this traditional fiduciary function, or where it is secondary, would represent a significant policy shift that should only occur following proper public notice and comment. The groups warned that if these crypto firms receive national trust bank charters providing traditional banking services like payments, other companies might follow, potentially posing material risks to the US banking and financial system.
Caitlin Long, founder of crypto-focused Custodia Bank, noted on social media that the banking groups’ challenge to whether trust charters could be used as “de facto bank charters” with reduced capital requirements is likely to lead to litigation. She questioned why banks wouldn’t simply convert to trust companies under the same model if the groups’ concerns materialize.
Alexander Grieve, head of government affairs at venture firm Paradigm, observed that despite typical disagreements, banks and credit unions concur that competition from crypto is imminent. Meanwhile, crypto-focused attorney Logan Payne explained that new stablecoin regulations under the GENIUS Act incentivize stablecoin issuers to seek national bank charters. The new license restricts issuers to stablecoin activities, but many issuers operate beyond that scope and would need separate state money transmission licenses to operate nationwide.
Obtaining a national trust bank charter with the OCC would allow stablecoin issuers to engage in a broader range of activities without securing multiple state licenses. This regulatory framework is expected to encourage more crypto firms to pursue bank charters as they navigate evolving legal landscapes.