U.S. banks call for delay on crypto charters, cite safety and soundness risks

Traders Union
All News
Crypto News
U.S. banks seek crypto charter pause

Highlights

The ABA is urging the OCC to slow crypto charter approvals until stablecoin rules are finalized.
Banking groups cite insolvency risks and incomplete regulatory frameworks as major concerns.
Crypto firms argue that national charters could embed digital assets more deeply into U.S. financial infrastructure.

In a detailed comment letter to the Office of the Comptroller of the Currency (OCC), the American Bankers Association (ABA) called for patience as Congress and multiple federal agencies continue drafting frameworks governing stablecoins and broader digital asset activities, Decrypt writes.

Banks push for stronger safeguards before approvals

The ABA urged the OCC to "ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation" and asked the agency to delay charter decisions until regulatory responsibilities are clearly defined.

The group warned that conditioning approvals on compliance with the GENIUS Act—whose "full regulatory implementation is likely years away"—creates uncertainty, since implementation will require rulemakings by the Treasury Department, Federal Reserve, FDIC and state regulators. Instead, the ABA encouraged 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 association also raised concerns about insolvency planning, pointing to failures such as FTX and Celsius in 2022. It urged the regulator to "ensure that its receivership capacities and related powers and practices are adequate to address any insolvency risks raised by any existing or new OCC charter applicant."

Growing tensions over crypto’s banking ambitions

Several crypto firms—including Circle, Ripple, Coinbase, Paxos and others—have pursued or obtained conditional OCC trust bank charters, seeking national licensing and potential access to Federal Reserve infrastructure.

Industry advocates argue that such approvals would modernize payments. "Once these firms get Fed access and national licensing, we will be talking about skipping the whole middle layer—no SWIFT, no correspondent chains, just native, regulated settlement," Anthony Agoshkov, co-founder of Marvel Capital, told Decrypt. “That’s a structural leap, and it puts crypto one step closer to being embedded in the financial stack — inside the system, with full credibility,” Agoshkov added.

At the same time, banking groups have pushed lawmakers to restrict stablecoin interest payments, a debate that recently stalled negotiations over a broader crypto market structure bill.

Transparency and naming concerns

Beyond capital and supervisory standards, the ABA also pressed the OCC for greater transparency in charter application reviews. It warned that limited public disclosure makes it difficult to assess operational and cybersecurity risks tied to emerging digital asset models.

The group further proposed barring non-bank trust companies from using the term “bank” in their names to prevent institutions from carrying "a title that misrepresents the nature of the institution or the services it offers."

Why this matters

The debate reflects a pivotal moment in the convergence of crypto and traditional finance. Charter approvals could grant digital asset firms deeper access to the U.S. financial system, reshaping payments and custody services. However, regulators face mounting pressure to ensure that innovation proceeds within clearly defined legal, supervisory and resolution frameworks.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.