US Banking Lobby Urges Delay on Crypto Bank Charter Approvals

• US banks asked the OCC to delay crypto-related bank charters until digital asset regulations are clearly defined.
• Crypto firms like Circle, Ripple, Coinbase, and Paxos seek charters that could give direct access to Federal Reserve systems.
• Banks warned that conditional approvals tied to the GENIUS Act could create financial and operational risks.

Major US banking groups are pushing regulators to slow approvals for crypto-related bank charters. The American Bankers Association (ABA) asked the Office of the Comptroller of the Currency (OCC) to delay decisions on digital asset firms until clear regulatory rules are in place.

The request targets crypto companies seeking national trust bank charters that could give them direct access to the Federal Reserve system and regulated settlement services.

Banks argue that approving these applications before lawmakers finalize crypto rules could create financial system risks. 

Banks Push for Delay on Crypto Charters

The ABA submitted a comment letter to the OCC calling for stronger safety standards, more transparency, and a slower approval process for crypto-related charters. The request responds to the OCC’s proposed changes to national bank charter rules.

The group warned that many crypto firms applying for charters operate in areas where regulations are still unclear. Congress and federal agencies have not fully defined rules for stablecoins and digital asset activities.

The ABA said regulators and applicants must fully understand these responsibilities before approvals move forward.

The banking lobby specifically raised concerns about conditional charter approvals tied to the GENIUS Act, a major US stablecoin law still under development.

The law requires rulemaking from multiple agencies, including the US Treasury, Federal Reserve, Federal Deposit Insurance Corporation, and state regulators. Full implementation could take years.

Banks urged the OCC to avoid rushing decisions based on traditional timelines and instead wait until regulatory obligations are clearly defined.

Crypto Firms Seek Direct Access to Financial System

Several major crypto firms are pursuing or already hold conditional OCC trust bank charters. These include Circle, Ripple, BitGo, Paxos, Coinbase, and Nomura’s Laser Digital. Trump-linked World Liberty Financial recently applied for a charter tied to its USD1 stablecoin.

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These charters could allow crypto firms to operate under federal oversight and settle transactions directly without relying on traditional correspondent banking networks.

Banks warn that granting charters before regulatory frameworks are complete could allow crypto firms to access Federal Reserve infrastructure without clear operational requirements.

The ABA also raised concerns that some companies could use bank charters to avoid oversight from other regulators, such as the Securities and Exchange Commission or the Commodity Futures Trading Commission.

Massive Concerns

The ABA asked the OCC to confirm that it has strong receivership powers to handle insolvency risks if crypto charter holders fail. If a chartered institution without federal deposit insurance collapses, the OCC would be responsible for managing its resolution.

The group also raised concerns about capital requirements, cybersecurity standards, and operational risks. It said limited public information about some charter applicants makes it difficult to assess these risks.

Banks further called for stricter naming rules. They urged regulators to block non-bank trust companies from using the word “bank” unless they are part of a bank holding company

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