The Office of the Comptroller of the Currency today announced it had conditionally approved national trust charter applications for five institutions that will focus almost exclusively on cryptocurrencies.
The OCC conditionally approved applications for de novo national trust charters for First National Digital Currency Bank and Ripple National Trust Bank. It also conditionally approved applications to convert from a state trust company to a national trust for BitGo Bank & Trust, Fidelity Digital Assets and Paxos Trust Company.
The approvals come roughly a week after Comptroller of the Currency Jonathan Gould dismissed concerns raised by bank advocates and others about allowing digital asset firms to establish national trust banks. In a statement today announcing the approvals, Gould said that new entrants in the federal banking system are good for the economy.
American Bankers Association President and CEO Rob Nichols said the OCC’s decision raises important questions about the scope and oversight of these institutions.
“While innovation in financial services can benefit consumers, it is critical that any chartered entity operates under a regulatory framework that appropriately addresses its activities and risks,” Nichols said. “We are concerned that expanding the trust charter in this way, particularly for entities that may not engage in traditional fiduciary activities, could blur the lines of what it means to be a bank and create opportunities for regulatory arbitrage. Clear answers are needed to ensure the public and policymakers understand how these charters will be supervised and how risks will be mitigated.”
Nichols’ remarks followed a July letter led by ABA calling for further scrutiny of the proposed charters and for public comment on the OCC’s approval process.
