American banks have officially approached the Office of the Comptroller of the Currency (OCC) in the U.S. with a demand to stop processing applications from cryptocurrency companies for banking licenses. Representatives of the banking industry emphasize that granting such licenses to crypto companies, including Circle, Ripple Labs, and Fidelity Digital Assets, represents a significant deviation from the current OCC policy.
This is reported by Finway
Bank Concerns About Risks to the Financial System
In a joint letter signed by the American Bankers Association and several industry organizations, it is highlighted that granting national banking status to cryptocurrency companies without adhering to strict regulatory standards could create additional risks to the financial stability of the U.S.
“Applicants have significant political and legal questions regarding whether their business plans encompass fiduciary functions traditionally performed by national trust banks,” the document states.
Banks argue that crypto companies are applying for trust bank charters in order to circumvent the stringent capital requirements and complex regulations typical of traditional banks, while failing to fully meet fiduciary obligations. According to the authors of the letter, issuing such licenses without proper public discussion and without ensuring traditional fiduciary activities would represent a substantial shift in OCC policy.
Response from the Crypto Community and Experts
The banks’ initiative has sparked a lively response among representatives of the crypto industry. Caitlin Long, founder of Custodia Bank, noted in her post on X that banking associations are reacting this way to new competition in the market, and questioned why banks themselves do not transition to trust company status with fewer regulatory barriers.
Alexander Grieve, head of public policy at Paradigm, pointed out that banks and credit unions are rarely unanimous, but this time they are united in their desire to limit cryptocurrency companies’ access to banking licenses, feeling the growing competition from the crypto industry.
At the same time, in light of U.S. President Donald Trump’s signing of the GENIUS Act regulating stablecoins, more crypto companies are seeking national banking licenses to operate across the country without needing separate permits in each state.
“Almost all stablecoin issuers in the U.S. engage in activities that fall outside the new license under the GENIUS Act. To operate nationwide, they would have to obtain money transmission licenses in each state.”
Logan Payne, an attorney with Winston & Strawn, emphasized that having an OCC license allows for federal-level operations with broader functionality and without additional approvals in each state. In early July, Ripple Labs already submitted an application for a banking license in the U.S.