The country’s largest banking lobby has asked the Office of the Comptroller of the Currency (OCC) to pause its review of crypto firms’ applications for national bank charters, arguing regulators should wait until key regulatory uncertainty is resolved. In a letter sent Wednesday, the American Bankers Association (ABA) urged the OCC to halt decision-making on charter applications for crypto companies, citing fast-evolving business models, insufficient transparency around the OCC’s application process, and the absence of finalized federal rules that will govern these firms. The ABA said the OCC should “ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation,” and be patient rather than forcing traditional timelines. Context: OCC approvals and industry reaction Last December the OCC granted conditional national bank charters to several major crypto players — Ripple, Circle, BitGo, Paxos and Fidelity — a move that prompted criticism from banks and others who warned those approvals could blur the line between banking and crypto activities and create opportunities for regulatory arbitrage (as previously reported by Bitcoinist). The ABA argues the OCC’s review process should wait until Congress finishes writing rules that many charter applicants will ultimately face, so the regulator can fully evaluate each applicant’s regulatory responsibilities before moving forward. Key requests from the ABA - Delay charter approvals until federal oversight and standards are clearer. - Maintain strong safety-and-soundness protections from the outset, including conflict-of-interest safeguards and strict compliance with consumer protection rules. - Amend OCC naming rules to prevent misleading use of the word “bank” by entities that limit activities to fiduciary or trust operations, which the ABA says would “not be engaged in the business of banking.” Politics and high-profile applications The letter comes as scrutiny of specific applicants mounts. World Liberty Financial, the Trump family’s crypto venture, applied for a national trust charter in January. Senator Elizabeth Warren has asked Comptroller Jonathan Gould to pause OCC review of that application until President Donald Trump divests from the company, warning of potential government-ethics issues. A related battleground: Fed access and “skinny” master accounts The dispute extends beyond charters to central bank access. Major U.S. banking groups recently told the Federal Reserve they oppose giving crypto and fintech firms direct access to Fed payment systems without a waiting period. The Bank Policy Institute, Clearing House Association and Financial Services Forum asked the Fed to require a 12-month delay before newly licensed firms could apply for payment accounts, arguing the Fed should “block access until newly licensed stablecoin issuers prove they can operate safely.” Crypto firms now generally access Fed services through partner banks, but the Fed’s “skinny” master accounts proposal — first floated in October — would let qualifying fintechs and crypto firms open limited Federal Reserve accounts directly, potentially reducing reliance on bank intermediaries. Critics from the banking sector and some consumer advocates say the proposal risks expanding the Fed’s role and could expose the system if oversight remains weaker for crypto firms; Better Markets CEO Dennis Kelleher called the plan “a reckless giveaway to the crypto industry” that could undermine the Fed’s mandate. What this means for crypto firms If regulators heed the ABA’s call, approval timelines for national bank charters could slow while Congress and federal agencies crystallize rules for digital-asset firms. Firms pursuing charters will face heightened scrutiny on safety, consumer protections and naming conventions, and the broader fight over Fed access could shape how crypto companies route payments and custody moving forward. Read more AI-generated news on: undefined/news