The Office of the Comptroller of the Currency (OCC) gave the green light on Friday for five crypto companies to have national trust bank charters under certain conditions, bringing some of the industry’s biggest players ever closer to the traditional banking sector.
Under conditions, the OCC approved applications submitted earlier this year by stablecoin issuer Circle Internet Group (CRCL) and crypto firm Ripple (RIPL.PVT) to establish their national trust banks, First National Digital Currency Bank and Ripple National Trust Bank, respectively.
The regulator also gave approval for Paxos, crypto custodian BitGo, and Fidelity Digital Assets to convert their state trust licenses into national charters. The decision comes after some in the banking industry grew skittish over the charter applications.
“New entrants into the federal banking sector are good for consumers, the banking industry and the economy. They provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system,” Jonathan Gould, Trump-appointed head of the OCC, said in a press release.
“The OCC will continue to provide a path for both traditional and innovative approaches to financial services to ensure the federal banking system keeps pace with the evolution of finance and supports a modern economy,” Gould added.
Unlike a full-service national bank charter, a national trust bank license doesn’t allow a company to make loans or take in deposits, and customer accounts typically don’t come with FDIC insurance.
Instead, it allows a company to safeguard customer assets, act on their behalf in payments and other transactions, and settle some of those transactions.
To get full approval for the trust bank license, the crypto firms must agree to a series of requirements, including minimum capital and liquidity designated by the OCC, and must limit their chartered company operations to trust banking activities.
They must also conform to rules laid out in the GENIUS Act, which Trump signed into law this summer, that sets a federal framework for dollar-pegged stablecoins in addition to future laws like a crypto market structure bill Congress is expected to vote on next year.
Until final approval is granted, the regulator has the right to change or suspend its preliminary conditional approval.
Along with hundreds of full-service national banks, federal branches of foreign banks, federal savings associations, and smaller community banks, the OCC oversees 60 other national trust banks.
Only one of those licensed lenders — Anchorage Digital — claims status as a player in the crypto space.