Financial organizations and associations are resisting the efforts of cryptocurrency companies seeking to acquire a bank charter.
In a joint letter sent to the Office of the Comptroller of the Currency (OCC) on July 17, the American Bankers Association (ABA) and four other bank trade groups have urged for a postponement in decisions on national trust bank charter applications from crypto-related companies like Ripple, Circle, and National Digital TR CO. The associations have raised significant policy, legal, and transparency concerns about these applications.
The letter follows several national trust bank charter applications filed since April 2025 by crypto firms, including Fidelity Digital Assets. These applications seek regulatory legitimacy, the ability to conduct activities in a regulated, safe, and sound manner, and the flexibility to operate under federal oversight.
However, the associations argue that granting these charters would be a fundamental departure from OCC precedent. They question whether crypto firms’ business models fit within the traditional scope of trust banks, which mainly manage assets and perform fiduciary functions rather than engage in lending or deposit-taking activities.
The key implications of this joint letter include a demand for greater transparency. The associations highlight that the applications are heavily redacted and lack sufficient public disclosure, which hinders meaningful public and stakeholder input on whether these companies should receive trust charters.
There are also concerns about consumer protection and regulatory differences. Because national trust banks differ from traditional banks—especially in capital requirements, insured deposits, and resolution frameworks—the associations worry about potential risks to consumers and the banking system if these charters are granted without thorough review.
Some associations view these trust charter applications as attempts by crypto firms to gain national bank-like powers and access to the banking system, which they believe might undermine traditional community banks and deposit bases.
The associations request the OCC postpone awarding charters until more detailed information about applicants’ business plans and activities is publicly available, enabling proper regulatory scrutiny and public commentary consistent with historical OCC transparency practices.
Michele Alt, a partner at consulting firm Klaros Group, and Patrick Hanchey, a partner at law firm Alston & Bird, echo similar views on the two-part application process and the need for more transparency.
It is important to note that the national trust bank charter applications were filed before the Guiding and Establishing National Innovation for US Stablecoins Act was signed into law. Confidential parts of applications are protected from Freedom of Information Act requests and public disclosure to safeguard proprietary business information.
The ABA's request for delay highlights the need to understand the exact use and accomplishments of the charters, as there's not much use-case evidence in this regard. A national trust bank charter differs from a traditional bank charter in that it has a more limited scope of authorization for financial activities.
The OCC has specific procedures for resolving uninsured banks, with the process involving the OCC appointing an independent receiver. The primary risk concerns for trust banks involve safeguarding assets, safeguarding against potential hacking vulnerabilities, and specific risks related to crypto assets.
In summary, the joint letter reflects banking industry resistance to crypto firms entering the national trust banking system under existing OCC policies without comprehensive review, clear public disclosure, and suitable safeguards. The associations are calling for a delay to address legal and policy uncertainties before approving these charter applications.
- The associations, including the American Bankers Association, have expressed concerns about financial institutions in the fintech industry, such as Ripple, Circle, and National Digital TR CO, seeking national trust bank charters, given the potential risks to consumers, the banking system, and the need for thorough regulatory scrutiny.
- The joint letter highlights the significance of greater transparency within the industry, as the applications from crypto firms for national trust bank charters are heavily redacted, which hampers meaningful public and stakeholder input on these applications and the potential conferment of national bank-like powers to these firms.
