US Banking Lobby Urges OCC To Delay Crypto Charter Applications Approval

Traditional finance just hit the brakes—hard.

Banking's biggest players are leaning on regulators, urging them to slow-walk the approval of special-purpose crypto charters. It's a classic defensive move from an industry that's watched its lunch get eaten by decentralized upstarts for the better part of a decade.

The Playbook: Delay, Delay, Delay

The strategy is transparent. Without a clear path to federal legitimacy, crypto-native firms remain in regulatory limbo—stuck navigating a patchwork of state-by-state money transmitter licenses. It keeps them off the main stage and, conveniently, out of the big banks' direct line of fire. It's the kind of bureaucratic trench warfare that Wall Street excels at.

Innovation vs. Inertia

This isn't about consumer protection; it's about protectionism. Every month of delay is another month the old guard doesn't have to compete on a level playing field. They're betting that red tape can stifle what free markets couldn't. A cynical but time-tested finance play: when you can't beat 'em, regulate 'em—or at least lobby to make sure nobody else can get regulated properly.

The clock is ticking. The OCC's decision will signal whether the future of finance gets built in the open or gets held hostage in committee.

US Banks Call For Crypto Charter Reviews Delay

On Wednesday, the American Bankers Association (ABA) asked the OCC to pause the review of national bank charter applications for crypto firms, citing uncertainty surrounding emerging business models, the need for greater transparency in charter application and decision-making processes, and a lack of finalized federal oversight.

In a letter, the banking lobby urged the US’s top bank regulator to “ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation to provide greater transparency throughout its charter application and decisioning processes.”

As reported by Bitcoinist, the OCC approved conditional bank charters for Ripple, Circle, BitGo, Paxos, and Fidelity in December, raising concerns that the approvals could blur the lines of banking activities and lead to regulatory arbitrage.

The ABA now calls for patience as emerging crypto regulatory frameworks take shape, suggesting that the review process must be delayed until Congress finishes the rules that many recent OCC charter applicants will ultimately be subject to.

“We urge the OCC to be patient, not measure its application decisioning progress against traditional timelines, and allow each charter applicant’s regulatory responsibilities to come fully into view before moving a charter application forward,” ABA wrote.

The banking association emphasized that appropriate safety and soundness protections, including effective measures against conflicts of interest, and for compliance with other applicable consumer protection laws and regulations, must be in place from the beginning.

Notably, the TRUMP Family’s main crypto venture, World Liberty Financial, applied for a national trust charter in January. US Senator Elizabeth Warren sent a letter to Comptroller Jonathan Gould asking the agency to pause its review of the application until President Donald Trump divests from the crypto company, arguing that it could create a government ethics problem.

In addition, the association recommended an amendment to the OCC’s regulations to ensure new charter applicants’ names “do not misrepresent the nature of the financial services they intend to offer.”

They suggested that the agency prohibit any charter applicant that limits its activities to either fiduciary activities or trust company operations from including the word “bank” in its name.

ABA argued that “such entities WOULD not be engaged in the business of banking and should, therefore, ‘not have a title that misrepresents the nature of the institution or the services it offers.’”

“Skinny” Accounts Clash

US banks have recently shared their opposition to granting crypto and fintech companies direct access to the Federal Reserve (Fed)’s payment systems, according to Bloomberg.

Earlier this week, the Bank Policy Institute, Clearing House Association, and Financial Services Forum sent a joint letter to the Fed, demanding a 12-month waiting period before firms are eligible to apply for payment accounts.

The banking groups argued the Fed “should block access until newly licensed stablecoin issuers prove they can operate safely.” As Bloomberg noted, crypto and fintech firms currently rely on partner banks for access and compliance infrastructure. However, the Fed’s “skinny” master accounts proposal, first introduced in October, would allow these crypto companies to bypass the intermediation.

Moreover, recent reports from Eleanor Terret claim that the tensions between the US banking sector and the crypto industry have extended from Stablecoin rewards to include the skinny master accounts proposal.

While the digital assets side was “largely positive,” Terret affirmed the banking side worried that crypto’s “less robust regulatory status could pose a problem,” with Better Markets CEO Dennis Kelleher calling the proposal “a reckless giveaway to the crypto industry that unnecessarily expands the Fed’s mandate without justification and undermines the Fed’s true mandate.”