US Banking Groups Urge OCC to Delay Crypto Firm Charters

On Thursday, several US banking groups collectively urged the Office of the Comptroller of the Currency (OCC) to postpone its decision on granting national banking charters to prominent crypto firms, including Circle Internet Group, Fidelity Digital Assets, and Ripple Labs. The banking groups, which include the American Bankers Association and various other banks and credit union trade groups, expressed significant concerns regarding the transparency and adequacy of information provided in the applications submitted by these crypto firms.

The primary issue highlighted by the banking groups is the insufficient detail in the applications, which makes it challenging to assess the business models and operational frameworks of these crypto firms. This lack of transparency could potentially lead to a shift in regulatory norms, thereby impacting the broader digital financial landscape in the United States. The groups emphasized that there are substantial policy and legal questions surrounding the proposed business plans of these applicants, particularly whether their activities align with the fiduciary responsibilities of national trust banks.

In their joint letter to the OCC, the banking groups also pointed out that the current applications do not allow for public scrutiny. This lack of transparency could result in a trust issue if the OCC were to change its policy without public examination. The groups warned that allowing these crypto firms to operate as national trust banks could expose the US banking and financial systems to material risks, potentially leading to disruptions in the financial landscape.

Crypto experts anticipate that the passage of the GENIUS Act will encourage more crypto firms to seek chartered banking licenses. As the US establishes a clear regulatory framework for the issuance of “payment stablecoin,” it has boosted confidence among crypto investors to expand their business with crypto licenses. Logan Payne, a crypto-focused lawyer at Winston & Strawn, confirmed that this charter license would enable crypto firms to engage in a wider range of activities without the need for state-to-state licenses in the US.