In a significant step that could further incorporate digital assets into the banking system, cryptocurrency behemoths like Ripple and Circle gained preliminary approval on Friday from a prominent U.S. banking regulator to establish national trust banks.
Two new national trust bank charters from Circle and Ripple, as well as applications from BitGo, Paxos, and Fidelity Digital Assets to convert state trust bank charters to national charters, enabling them to conduct business nationwide, were conditionally approved by the Office of the Comptroller of the Currency.
Before any of the trust banks can start operating, the regulator must still give its final permission.
The National Trust Bank charters, if approved, would enable the businesses to retain and manage assets on behalf of clients and expedite payment settlement.
However, the license prohibits the businesses from making loans or accepting cash deposits.
The only digital asset company holding a national trust bank charter at the moment is the cryptocurrency platform Anchorage Digital.
There are sixty national trust banks under the OCC’s supervision.
According to Comptroller of the Currency Jonathan Gould, “New entrants into the federal banking sector are good for consumers, the banking industry, and the economy.”
The banking sector had asked the OCC to reject several of the applications, claiming that the charters would increase systemic risk and enable cryptocurrency companies to choose a less stringent regulatory approach.
The decision to issue conditional permissions “leaves substantial unanswered questions,” according to a statement from the Bank Policy Institute, including whether the companies’ requirements will be customized to their risks. After soliciting donations from the cryptocurrency sector throughout his campaign, U.S. President Donald Trump has attempted to change the country’s cryptocurrency regulations significantly
