Banking trade associations in the United States have urged regulators to delay decisions on crypto firms applying for national trust bank charters. The request was submitted in a letter addressed to the Office of the Comptroller of the Currency (OCC). The letter came from the American Bankers Association and other financial institution groups, who expressed concern over the nature of the crypto firms’ applications and their lack of public transparency.

US Banking Groups Oppose Crypto Firms’ Banking License Applications

The American Bankers Association and several credit union associations asked the OCC to pause its charter approvals for crypto firms. Their letter focused on companies like Ripple Labs, Circle Internet Group, and Fidelity Digital Assets, all of which are seeking national trust bank charters.

The groups stated that granting charters to firms without fully disclosing their business plans would be a policy departure. They said, “Providing custodial services for digital assets is not a fiduciary activity,” and that these proposed operations do not reflect the historic role of trust banks. The letter warned that approvals could change regulatory standards without public review or formal comment.

Concerns Over Public Review and Regulatory Precedent

Banking groups also criticize the sharing of information on crypto firms for a lack of public disclosure of the applications made to these firms. According to them, the filings had not been detailed enough to allow meaningful comments by the people. They further said that in case the OCC approves the applications without asking them more questions, legal and procedural issues would arise.

The groups observed that crypto firms could be allowed to provide more traditional services, such as payments, via granting charters, less regulated and with lower capital standards. It might result in the application of other firms in that regard, which might pose threats to the general financial system.

Caitlin Long, founder of Custodia Bank, addressed the issue on X. She pointed out that if trust charters are used as bank charters with lighter rules, traditional banks might convert to reduce regulatory burdens. She said the matter is “very likely to be litigated.”

THIS ISSUE👇 of whether trust charters can be used as de facto bank charters (including making loans + obtaining Fed master accounts) at only 10-15% of the capital requirement of a bank is very likely to be litigated. Interesting reaction by the bank trade associations to… pic.twitter.com/ecKnyV1wur

— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) July 19, 2025

Stablecoin Issuers Face New Licensing Considerations

Crypto firms are increasingly seeking national charters due to recent policy changes. According to Logan Payne, a lawyer at Winston & Strawn, stablecoin laws under the GENIUS Act limit issuer activity under state laws. However, national trust charters would allow firms broader operating freedom without the need for state-by-state licenses.

Payne added that most stablecoin issuers currently operate beyond the GENIUS Act’s scope. Consequently, the issue of licensing of national banks provides a channel through which these firms can meet the requirements as they develop services.

The OCC has yet to react to the request by the banking groups. Nevertheless, the controversy involves an increasing barrier between conventional banking institutions and crypto companies that want full regulated entry.