Crypto Trust Bank Approvals Face Resistance From Banking Sector

Key Takeaways

• The American Bankers Association wants the OCC to slow crypto trust bank approvals.
• Banks cite regulatory uncertainty and financial stability risks.
• Recent OCC approvals for major crypto firms triggered the backlash.
• The crypto sector calls the effort protectionist.

In a February 11 comment letter, the group called for a more cautious approach as regulators reshape the digital asset landscape. The move signals growing tension between traditional banks and crypto-native firms seeking deeper integration into the federal banking framework.

Regulatory Concerns Take Center Stage

At the heart of the ABA’s argument is regulatory uncertainty. The group says the OCC should wait until federal agencies fully define the framework under the Guiding and Establishing National Innovation for US Stablecoins Act, also known as the GENIUS Act. According to the ABA, moving forward with charter approvals before the rules are finalized could create inconsistencies and long-term supervisory risks.

The banking lobby also raised concerns about safety and soundness. It warned that many crypto-focused business models lack traditional fiduciary activities and may face heightened insolvency and cybersecurity risks. From the ABA’s perspective, granting national trust charters to such firms without the same capital and compliance standards applied to full-service banks could expose the system to vulnerabilities.

Another flashpoint is branding. The ABA recommended prohibiting non-bank charter applicants from using the word “bank” in their names, arguing that it could mislead consumers into believing these entities operate under the same regulatory structure as traditional institutions.

A Question of Fair Competition

Banking groups, including the Bank Policy Institute, have repeatedly argued that limited-purpose charters allow crypto firms to access federal oversight and credibility without shouldering the full regulatory burden imposed on conventional banks. In their view, this creates an uneven playing field.

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The OCC’s recent actions help explain the urgency behind the ABA’s letter. In December 2025, the regulator granted conditional national trust bank approvals to several major digital asset firms, including Ripple, BitGo, Paxos, Circle, and Fidelity Digital Assets.

In addition, recent OCC interpretive letters clarified that national banks may conduct so-called riskless principal crypto transactions and hold small amounts of digital assets to cover blockchain gas fees. In January 2026, the agency issued a Notice of Proposed Rulemaking to clarify that national trust banks can engage in activities incidental to banking – a proposal that directly triggered the ABA’s latest response.

Crypto Industry Pushes Back

The crypto sector has not remained silent. The Blockchain Association has described the banking lobby’s efforts as protectionist, arguing that established financial institutions are attempting to preserve dominance over financial services while slowing innovation.

For crypto firms, national trust charters represent legitimacy, direct access to federal oversight, and a clearer pathway to offering regulated digital asset services. For traditional banks, they represent competitive pressure and regulatory asymmetry.

As federal agencies continue shaping stablecoin and digital asset rules, the outcome of this dispute could determine how deeply crypto becomes embedded within the US banking system – and who ultimately controls that future.

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