Top U.S. banking and credit union associations have formally urged the Office of the Comptroller of the Currency (OCC) to halt its review of banking charter applications from crypto firms, citing major policy and legal concerns. In a joint letter, the American Bankers Association and other trade bodies argued that granting national trust bank charters to companies like Circle, Ripple Labs, and Fidelity Digital Assets would mark a “fundamental departure” from established regulatory practices.
The groups claim that the crypto firms’ business models do not involve traditional fiduciary activities and therefore fall outside the historical scope of national trust bank functions. They also criticized the lack of publicly available information in the applications, saying this undermines the transparency and accountability of the chartering process.
Banking groups fear that approving such licenses would set a precedent for other firms to enter the banking system with fewer capital requirements and regulatory oversight, posing systemic risks. They insist that any such regulatory shift should go through a formal public consultation process.
The dispute highlights growing tension between traditional financial institutions and digital asset firms as the latter seek to gain regulatory legitimacy and operational flexibility. Analysts expect more crypto companies to apply for federal bank charters, particularly in light of new stablecoin laws under the GENIUS Act, which make national licenses more appealing than state-level compliance.
Industry voices, including Custodia Bank founder Caitlin Long and Paradigm’s Alexander Grieve, have weighed in, calling the reaction from traditional banks a sign of growing competitive pressure from crypto players.
