US Banking Lobby Demands Crypto Charter Freeze Until Regulatory Fog Clears
Wall Street's old guard is slamming the brakes.
Major US banking associations are mounting a coordinated push to halt all new special-purpose crypto bank charters. Their demand is blunt: regulators must first draw clear, enforceable rules of the road. No more navigating by guesswork.
The Core Conflict: Charter vs. Chaos
The fight centers on the specialized banking licenses that allow firms to custody digital assets and facilitate payments. Crypto-native companies see them as a lifeline—a way to operate with legitimacy. Traditional banks view them as a dangerous shortcut, letting newcomers bypass the stringent capital and compliance burdens they shoulder daily.
It's a classic regulatory arbitrage play, wrapped in blockchain jargon.
Why the Sudden Urgency?
The pressure campaign isn't happening in a vacuum. As digital asset adoption inches forward, the gray area around who can be a 'crypto bank' and what they can do is becoming a glaring risk. The banking groups argue that allowing charters to proliferate under vague guidelines sets the stage for systemic instability—the very thing regulations exist to prevent.
They want a comprehensive framework before another license is issued. No more piecemeal approvals.
The Stakes for Crypto's Future
This isn't just bureaucratic squabbling. A prolonged freeze could starve crypto firms of the banking infrastructure they desperately need to scale, potentially stifling innovation and pushing activity further into the shadows or offshore. Conversely, granting charters without robust rules could embed fragility into the financial system.
The outcome will signal whether the US intends to build a regulated on-ramp for digital finance or permanently guard the toll booth.
Ultimately, it's a power struggle over who gets to define the future of money. The banks, with their armies of lobbyists and legacy influence, are betting that slow-walking the process protects their turf. The crypto industry sees it as another move to protect oligopoly profits under the guise of consumer safety—because nothing says 'financial innovation' like a good old-fashioned regulatory moat.
Will traditional trust banking activities change?
The lobby argues that the proposed business plans from crypto firms represent a major policy shift from how trust charters historically have been used. According to the joint letter, “there are significant policy and legal questions as to whether the applicants’ proposed business plans involve the types of fiduciary activities performed by such banks.”
Traditional national trust banks perform fiduciary duties like real estate and trust management, acting as guardians for client assets with strict legal obligations.
On the other hand, the ABA noted that crypto firms mostly offer custody and digital asset services, which are functions that fall outside the established trust banking framework. “A decision to grant the charters WOULD represent a fundamental departure from OCC precedence,” the letter reads.
The ABA also criticized the lack of transparency in crypto charter applications, stating that having public portions of filings “do not allow for meaningful public scrutiny” of business models, financial oversight and risk management systems.
They stated that “The responsibilities of many recent and likely future charter applicants are not readily identifiable today because Congress, federal, and state regulators have not yet adequately defined regulatory frameworks applicable to entities engaged in stablecoin and other digital asset activities.”
At the same time, one of the major concerns of the banking groups is timing. The OCC conditioned charter approvals on applicants’ compliance with the GENIUS Act stablecoin legislation signed into law in July 2025 that requires issuers to operate under federal oversight.
However, analysts note that the law’s full regulatory implementation may likely take some years and still requires five separate agencies to complete their own sets of rules.
Wave of crypto charter applications floods OCC pipeline
The ABA’s intervention is in response to the OCC processing a surprising amount of crypto-related charter applications. In December 2025, the agency granted conditional approvals to five major crypto firms: Circle (the USDC issuer), Ripple Labs, BitGo, Fidelity Digital Assets, and Paxos. These charters allow the firms to establish national trust banks, although they cannot accept cash deposits or issue loans.
The application pipeline continues to grow nonetheless. Trump-linked World Liberty Financial announced on January 7, 2026, that subsidiary WLTC Holdings LLC applied for a national trust charter to operate the World Liberty Trust Company.
If approved, the entity will be able to issue and custody the USD1 stablecoin, which has already reached $5.4 billion in circulation. More applications are pending from Coinbase, Crypto.com’s subsidiary Bridge, Sony’s Connective, and Brazilian neobank Nubank.
To date, only Anchorage Digital operates as a federally chartered crypto bank, receiving its national trust charter in 2021. The spike in applications is a result of the GENIUS Act, which created pathways for stablecoin issuers seeking federal oversight.
Banking industry fights crypto’s leap into federal finance
There is a growing concern about crypto firms gaining access to the federal financial infrastructure that traditional banks have relied upon for decades.
The ABA’s letter reflects this concern as well through its policy recommendations. The association strongly encouraged the OCC to ensure that its capacities and powers are adequate to address any insolvency risks raised by any existing or new OCC charter applicant, especially those experimenting with new business lines bearing unfamiliar risks.
The banking groups also pushed for naming restrictions, urging the OCC to “to amend its regulations to prohibit any charter applicant (other than a subsidiary of a bank or bank holding company) that limits its activities to either ‘fiduciary activities’ or ‘the operations of a trust company’ from including the word ‘bank’ in its name.”
According to the ABA, this would ensure entities don’t “have a title that misrepresents the nature of the institution or the services it offers.”
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