US regulator grants crypto firms initial approval to launch trust banks

[NEW YORK] Crypto giants, including Ripple and Circle, on Friday (Dec 12) received preliminary approval from a top US banking regulator to establish national trust banks, in a major move that could further integrate digital assets into the banking system.

The Office of the Comptroller of the Currency (OCC) conditionally approved two new national trust bank charters from Circle and Ripple, and conditionally approved applications from BitGo, Paxos and Fidelity Digital Assets to convert state trust bank charters to national charters, allowing them to operate across the country.

The regulator still has to sign off with a final stamp of approval before each of the trust banks can begin to operate.

If finalised, the national trust bank charters would allow the companies to manage and hold assets on behalf of customers and settle payments faster. The license does not, however, allow the companies to take cash deposits or make loans.

Crypto platform Anchorage Digital is currently the only digital asset company with a national trust bank charter. The OCC supervises a total of 60 national trust banks.

“New entrants into the federal banking sector are good for consumers, the banking industry and the economy,” said Comptroller of the Currency Jonathan Gould.

The banking industry had urged the OCC to reject several of the applications, arguing the charters would allow crypto companies to opt for a lighter regulatory touch and heighten systemic risk.

In a statement, the Bank Policy Institute said the decision to grant conditional approvals “leaves substantial unanswered questions”, including whether requirements for the companies will be tailored to their risks.

US President Donald Trump has sought to broadly overhaul US cryptocurrency policies after courting cash from the industry on the campaign trail. REUTERS