The country’s largest banking lobby is urging the Office of the Comptroller of the Currency (OCC) to hit pause on reviewing crypto firms’ applications for national bank charters until federal regulatory uncertainty clears. In a letter sent Wednesday, the American Bankers Association (ABA) asked the OCC to delay decisions on crypto charter applications, arguing that novel business models, gaps in federal oversight, and insufficient transparency around the OCC’s application and decision-making processes make it premature to approve charters now. The ABA wrote that the regulator should “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.” Background and why this matters - The OCC approved conditional national bank charters for several crypto firms in December — including Ripple, Circle, BitGo, Paxos and Fidelity — moves that raised industry alarms over potential regulatory arbitrage and blurred boundaries between traditional banking and crypto activities. - The ABA says the regulator should wait until Congress and other federal authorities finish crafting rules that many charter applicants will ultimately need to follow. “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,” the letter added. Key ABA concerns - Safety and soundness: The association presses for clear, enforceable protections from the outset, including strong conflict-of-interest rules and compliance with consumer-protection laws. - Transparency: The ABA wants greater visibility into how the OCC evaluates and decides on charter applications. - Naming and market clarity: The group proposed amending OCC rules so applicants cannot misrepresent the nature of their services. It recommends barring entities that limit operations to fiduciary or trust-company activities from calling themselves “banks,” arguing “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.’” Political flashpoint The debate has taken on a political dimension: World Liberty Financial — described as the Trump family’s primary crypto venture — applied for a national trust charter in January. Senator Elizabeth Warren has asked Comptroller Jonathan Gould to pause review of that application until President Donald Trump divests from the company, warning of a potential government ethics issue. Related banking resistance to Fed access The pushback from banks extends beyond charters. Several major banking groups — the Bank Policy Institute, the Clearing House Association and the Financial Services Forum — told the Federal Reserve this week they want a 12-month waiting period before newly licensed stablecoin issuers can apply for Fed payment accounts. They argue the Fed should deny access until stablecoin firms prove they can operate safely. Currently, many crypto and fintech firms rely on partner banks for Fed access and compliance infrastructure; a “skinny” master account proposal from the Fed, first floated in October, would let some of those firms obtain direct access, bypassing traditional banking intermediaries. Critics say the proposal risks widening the regulatory gap. Better Markets CEO Dennis Kelleher called the idea “a reckless giveaway to the crypto industry that unnecessarily expands the Fed’s mandate without justification and undermines the Fed’s true mandate.” What’s next The ABA’s letter asks the OCC to slow the pace of charter approvals as federal rules crystallize. With congressional action, regulatory guidance and high-profile political scrutiny all in motion, the next few months could determine whether the U.S. adopts a cautious, centralized approach to crypto banking or continues to allow charters and Fed access to move ahead on a case-by-case basis. Industry observers will be watching OCC decisions, congressional developments, and the Fed’s stance on master accounts for how institutional crypto access ultimately evolves. Read more AI-generated news on: undefined/news

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