In brief
- The banking lobby warned that conditional charters tied to unfinished legislation like the GENIUS Act could give crypto firms Fed access before regulators have fully defined their obligations.
- Several major crypto firms are seeking or hold OCC trust bank charters that could allow direct, regulated settlement without traditional correspondent banking layers.
- The push reflects a broader effort by banks to limit crypto’s expansion into federally regulated finance, including successful efforts to ban stablecoin yield provisions.
America's largest banking lobby is telling the country's top bank regulator to pump the brakes on crypto charter applications, warning that approving new digital asset firms before Congress finishes writing the rules they would operate under poses risks to the financial system.
In a comment letter submitted Wednesday to the Office of the Comptroller of the Currency, the American Bankers Association urged the agency to "ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation"—and to slow its charter decisioning process while regulatory frameworks for stablecoin and digital asset activities remain undefined.
The letter comes as several crypto firms, including Circle, Ripple, BitGo, Paxos, Coinbase, and Nomura’s Laser Digital, pursue or hold conditional OCC trust bank charters, with Trump-linked World Liberty Financial the latest to apply for one covering its USD1 stablecoin.
"Once these firms get Fed access and national licensing, we will be talking about skipping the whole middle layer—no SWIFT, no correspondent chains, just native, regulated settlement, Anthony Agoshkov, co-founder of Marvel Capital, told Decrypt.
“That’s a structural leap, and it puts crypto one step closer to being embedded in the financial stack — inside the system, with full credibility,” Agoshkov added.
The ABA criticized the OCC's recent practice of conditioning charter approvals on applicants' compliance with the GENIUS Act, a law whose "full regulatory implementation is likely years away" and still requires five agencies to complete their own rulemakings, according to the association.
The banking lobby urged the OCC to "be patient, not measure its application decisioning progress against traditional timelines, and allow each charter applicant's regulatory responsibilities to come fully into view before moving a charter application forward."
The association also raised alarms over resolution risk, pointing to the collapses of FTX and Celsius in 2022 as evidence that novel business models can fail in ways regulators are ill-equipped to manage.
The ABA urged the regulator to "ensure that its receivership capacities and related powers and practices are adequate to address any insolvency risks raised by any existing or new OCC charter applicant."
It also pushed to bar non-bank trust companies from using the word "bank,” a step it said would ensure institutions do not carry "a title that misrepresents the nature of the institution or the services it offers."
The letter is the latest front in a months-long campaign by banking groups to shape and slow crypto's march into federally regulated finance.
Last month, the ABA's Community Bankers Council sent a letter to lawmakers warning that crypto companies were already skirting the GENIUS Act's ban on stablecoin interest payments by funneling rewards through affiliated exchanges.
That pressure has spilled directly into the crypto market structure bill, where the same stablecoin yield fight brought negotiations to a halt.
Banks secured language in the latest draft banning crypto companies from paying any form of interest or yield on stablecoin holdings, prompting Coinbase CEO Brian Armstrong to abruptly withdraw support for the legislation hours before a Senate Banking Committee markup, warning the bill would be "materially worse than the current status quo."