Banks Push Back on OCC Crypto Charter

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In a sharp escalation of tensions between traditional finance and digital asset firms, five major banking trade associations have called on the Office of the Comptroller of the Currency (OCC) to hit pause on a string of national trust bank charter applications submitted by cryptocurrency companies.

In a joint letter to the OCC on July 17, the associations warned that applications from companies such as Fidelity Digital Assets, Ripple, Circle, and National Digital TR CO lacked the transparency necessary for meaningful public input.

The joint signatories included the American Bankers Association, America’s Credit Unions, the Consumer Bankers Association, the Independent Community Bankers of America, and the National Bankers Association.

The letter argues that key information about the applicants’ business models, intentions, and operations has been withheld from public view, preventing stakeholders from fully assessing the implications of granting federal trust charters to crypto entities.

“Given these substantial concerns, and the policy, legal, and commercial implications that chartering the Applicants would have for the banking system, the Associations urge the OCC to postpone consideration of the Applications,” the letter states.

It urges the OCC to maintain its historically transparent charter review process and hold off on approvals until more information becomes available for public comment.

If granted, the national trust bank charters would give crypto firms federal legitimacy and simplify their regulatory oversight.

But they would also represent a major policy shift, allowing digital asset companies to operate under a specialized banking designation traditionally reserved for firms that manage trusts and custody services, not full-service depository institutions.

Patrick Hanchey, a partner at Alston & Bird, noted that the OCC’s charter application process includes both public and confidential portions, with proprietary business details routinely shielded from public disclosure.

This confidentiality, he said, is standard practice and protected under the Freedom of Information Act.

Even if the OCC delays these applications, Hanchey said he does not expect additional information to be made public.

“There’s nothing nefarious here; this is very common practice,” echoed Michele Alt, a partner at Klaros Group, who reinforced the notion that transparency standards have remained consistent.

The OCC does occasionally hold public hearings during the application process, but those hearings usually focus on broader concerns such as community impact or competitive dynamics, not the internal details of a firm’s business strategy.

The trust charter itself differs significantly from a traditional bank charter. Trust banks cannot lend money or take insured deposits, and instead focus on asset management, custodial duties, and fiduciary activities on behalf of clients.

These firms do not hold assets on their own balance sheets, so their capital requirements differ markedly from those of traditional banks.

Nonetheless, the potential approval of such charters for crypto-native companies has stirred concern among incumbents who view the move as a possible backdoor for digital asset firms to gain banking privileges without full regulatory burdens.

The OCC has not yet responded publicly to the letter. However, with prominent names like Ripple and Fidelity Digital Assets in the mix – and a growing number of crypto firms seeking formal banking pathways – the debate over chartering authority is set to intensify.