A coalition of major U.S. banking and credit union associations, including the American Bankers Association and Independent Community Bankers of America, has urged the Office of the Comptroller of the Currency (OCC) to delay decisions on crypto firms’ applications for national bank charters. They argue that approving banking licenses for blockchain-native companies like Circle, Ripple, and Fidelity Digital Assets would represent a “fundamental departure” from established OCC policies.
Transparency Concerns at the Core
These groups contend that the limited public data in current applications makes it impossible for regulators or the public to fully assess the proposed business models. In their letter, they emphasize that crypto firms aren’t offering traditional fiduciary services—such as managing client assets in trust—calling into question whether their models fit within the existing charter framework.
A Major Shift in Regulatory Norms
The banks warn that allowing firms to gain full national trust bank charters—and thus the ability to settle payments and custody digital assets—could enable non-bank entities to perform core banking functions without undergoing comparable scrutiny or capital checks. They view this as a significant shift away from historical OCC requirements.
Litigation Looms Over Charter Definitions
Caitlin Long, founder of Custodia Bank, commented that the debate over whether a trust charter can function like a bank charter with reduced capital thresholds “is very likely to be litigated.” She argues that if crypto firms can access charters under lighter capital regimes, traditional banks could easily follow suit.
Unlikely Allies in the Lobbying Mix
Remarkably, banks and credit unions are aligned in their concern about competition from crypto ventures. Paradigm’s government affairs head, Alexander Grieve, said this unusual consensus shows that “they’re finally about to have some competition”.
GENIUS Act Spurs Banks Toward Licensing
Legal experts highlight the effect of the GENIUS Act’s stablecoin rules: to issue stablecoins under federal regulation, many issuers will need a national bank charter. Logan Payne, an attorney at Winston & Strawn, explains that such a charter would streamline operations by enabling crypto firms to bypass complex, multi-state licensing requirements.
Broader Tensions in Finance
This clash comes amid a broader pattern of crypto-traditional finance tensions. Banks have previously voiced concern over yield-bearing stablecoins and debate surrounds whether de facto regulation (like Operation Choke Point 2.0) may have discouraged bank engagement with crypto firms.
Why This Matters
How the OCC responds will shape whether crypto companies can integrate core payment and custody services under one federal entity, potentially reshaping the future of financial infrastructure. The debate forces us to ask: Can decentralized asset providers function within legacy financial models? Should those models evolve?
What to Watch
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Will the OCC grant or delay charters for firms like Circle and Ripple?
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Will there be new public hearings, legal reviews, or rule-making on the meaning of “fiduciary activity”?
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Will banks pivot toward crypto through yield-bearing stablecoins or joint stablecoin initiatives, as suggested by the WSJ?
This letter from the banking lobby signals deep apprehension about crypto firms gaining access to federal charters. As traditional institutions and crypto-native players push for regulatory clarity, the outcome will determine whether digital asset businesses continue innovating outside banks—or become banks themselves.
