World Liberty Financial Seeks OCC Trust Bank Charter for Stablecoin Expansion

World Liberty Financial’s subsidiary, WLTC Holdings LLC, has filed a de novo application with the Office of the Comptroller of the Currency (OCC) to establish World Liberty Trust Company, National Association (WLTC). The proposed trust bank will focus on stablecoin operations, specifically the issuance and custody of USD1, a dollar-backed stablecoin. If approved, the entity will operate under federal oversight and serve institutional clients, including exchanges and investment firms.

The application marks a pivotal step in integrating digital assets into the traditional banking system. Several crypto firms have recently secured preliminary approvals for national trust bank charters, reflecting growing regulatory acceptance of stablecoin operations. The OCC supervises approximately 60 national trust banks and has long regulated trust activities.

USD1, launched last year, has gained significant traction in the market. The stablecoin currently holds over $3.3 billion in circulation, making it one of the fastest-growing stablecoins in history. WLTC plans to expand its services to include custody and conversion of USD1 and other accepted stablecoins, with no fees at launch.

Why Did This Happen?

The move aligns with recent legislative developments, including the GENIUS Act, which established a federal regulatory framework for stablecoins. The act aims to create clarity for market participants and provide a legal foundation for stablecoin issuance and custody. By operating under federal supervision, WLTC can offer a full-stack offering that includes issuance, custody, and conversion services, all under a single regulated entity.

Zach Witkoff, the proposed president and chairman of WLTC, emphasized the importance of a national trust charter in providing institutional clients with a secure and regulated platform for stablecoin operations. Institutions are already using USD1 for cross-border payments, settlement, and treasury functions. The trust bank structure is designed to offer the same level of regulatory clarity and asset protection as traditional banks.

What Are Analysts Watching Next?

Analysts are closely watching the regulatory response to the application. The OCC has shown openness to new entrants, having approved five conditional charters in December 2024 for companies like Circle, Ripple, and BitGo. A national trust charter could enhance the credibility of USD1 and its associated services among institutional investors.

The trust bank will be subject to rigorous anti-money laundering (AML) and cybersecurity protocols. Mack McCain, the proposed trust officer of WLTC, noted that the trust will operate under the same framework as other OCC-supervised entities, with segregated customer assets and independent reserve management.

The application also raises questions about the potential for systemic risk. Some industry experts have expressed concerns that granting trust charters to crypto companies might expand their influence in the financial system without sufficient safeguards. However, proponents argue that trust banks can enhance financial innovation and competition by offering new products and services.

How Might This Impact the Market?

The approval of a trust bank charter for WLTC could accelerate the adoption of USD1 and similar stablecoins among institutional participants. The ability to offer fee-free conversion between USD and USD1 at launch is expected to attract additional liquidity and usage.

BitGo, a key strategic partner of World Liberty Financial, has already supported USD1's rapid growth. If the trust bank structure is approved, it could strengthen the stablecoin's position in the market and expand its use cases, particularly in cross-border transactions and treasury management.

The broader regulatory environment for crypto is also evolving. In the U.S., the Senate Banking Committee is scheduled to vote on a market structure bill for cryptocurrencies in the coming weeks. This legislation could further shape how stablecoins and other digital assets are integrated into the traditional financial system.

World Liberty Financial is also navigating potential conflicts of interest. President Trump is listed as a co-founder of the company, and concerns have been raised about his ties to the broader crypto industry. Zach Witkoff, who would lead WLTC, stated that the trust company was structured to avoid conflicts, with the Trump family not serving as executives or exercising day-to-day control.

World Liberty Financial’s trust bank application represents a significant milestone in the ongoing integration of stablecoins into the U.S. financial system. If approved, the entity could serve as a model for future crypto-related bank charters, potentially reshaping how stablecoins are issued, custody, and used by institutional participants.

Why This Matters for Investors

Investors are watching closely to see how the application is received by regulators and the market. A successful outcome could enhance the legitimacy of USD1 and potentially expand its use in financial transactions. The trust bank structure also offers a regulated framework for custody and conversion, which could attract institutional clients seeking secure and transparent stablecoin services.

The move could also influence the broader crypto market structure. As regulatory clarity improves, more institutions may participate in the stablecoin ecosystem, driving increased liquidity and adoption. This could lead to further growth in tokenized assets and decentralized finance (DeFi) applications.

World Liberty Financial’s trust bank application is part of a larger trend of crypto companies seeking to expand their presence in the traditional financial system. The outcome will be a key indicator of how regulators approach the integration of digital assets into mainstream finance.

Final Thoughts

World Liberty Financial’s trust bank application highlights the growing convergence between crypto and traditional finance. The proposed structure aims to offer a secure, regulated platform for stablecoin operations, with a focus on institutional clients. If approved, the trust bank could serve as a model for future stablecoin initiatives and expand the use of USD1 in cross-border transactions and treasury management.

The application also reflects broader regulatory and market shifts. As the U.S. and other jurisdictions develop frameworks for stablecoins and digital assets, the role of trust banks and other regulated entities is expected to grow. This could lead to increased adoption of stablecoins and a more robust financial infrastructure for digital assets.