US Banking Groups Urge OCC to Delay Crypto Bank Licenses Amid Policy Concerns

Major US banking trade groups have called on the Office of the Comptroller of the Currency (OCC) to delay its decision on granting bank licenses to crypto firms, arguing that the move could mark a significant departure from existing banking policy. In a letter sent on Thursday, the American Bankers Association and several credit union groups stated that approving national bank charters for stablecoin issuers like Circle Internet Group, Ripple Labs, and Fidelity Digital Assets raises “significant policy and process concerns” that require public scrutiny. The groups argued that the proposed business plans of these crypto firms do not align with the fiduciary activities traditionally performed by national trust banks. If approved, the licenses would enable crypto firms to act as their own banks, settle payments rapidly, and operate under a federal regulatory structure, allowing them to bypass complex state-level licensing while expanding operations across the US . Pushback on Crypto Firms Becoming National Banks The banking groups emphasized that the public portions of the crypto firms’ applications do not offer enough information for stakeholders to evaluate their business models and operations. They warned that allowing crypto firms to operate as national trust banks without the traditional fiduciary activities would be a significant policy shift that should occur only with a proper public notice and comment period. “Providing custodial services for digital assets is not a fiduciary activity, and granting charters where traditional fiduciary activity is absent would represent a significant change in OCC policy,” the letter stated. The groups expressed concerns that if crypto firms are allowed to provide traditional banking services like payments under a trust charter, it could encourage more non-bank companies to seek similar licenses, presenting what they described as a “material risk to the US banking and financial system.” Rising Interest in Banking Licenses Caitlin Long, founder of Custodia Bank, commented on X that the dispute over whether trust charters can serve as “de facto bank charters” with minimal capital requirements is likely to lead to litigation. She highlighted the paradox that if crypto firms succeed in obtaining trust charters for banking activities, traditional banks might convert to trust companies to reduce regulatory burdens. Alexander Grieve of Paradigm noted the unusual unity between banks and credit unions on the matter, saying, “They seem to agree that they’re finally about to have some competition from crypto.” Logan Payne, a crypto lawyer at Winston & Strawn, explained that under the newly passed GENIUS Act stablecoin laws , crypto firms face incentives to seek a national banking license to expand their activities beyond stablecoin issuance without requiring state-by-state licenses. According to Payne, securing an OCC charter would allow stablecoin issuers to operate more freely while engaging in a broader range of financial services within a unified federal framework. The post US Banking Groups Urge OCC to Delay Crypto Bank Licenses Amid Policy Concerns appeared first on TheCoinrise.com .

Source: The Coin Rise