Key dealers
- A number of banking industry groups have challenged Ripples and the Circle bids to get bank charters.
- The groups ask OCC to avoid making a major policy shift without a transparent and formal regulatory process.
Top American banking groups are pushing on OCC to delay measures for Trust Bank applications by Ripple, Circle and others until full business plans have been revealed and stakeholders have a meaningful opportunity to review and comment on the political consequences.
Ripple and Circle are among several digital asset companies that have submitted applications to establish federally regulated national trust banks in the United States.
Circle, after its stock exchange listing, applied for a license Managing USDC reserves and institutional crypto assets.
Ripple followed soon, archiving to monitor their StableCoin business and expand their services under OCC supervision. Their proposed units are first National Digital Currency Bank and Ripple National Trust Bank respectively.
Five major banking organizations – American Bankers Association, America’s Credit Union, Consumer Bankers Association, Independent Community Bankers of America and the National Bankers Association – claim that these business models do not meet the legal requirement for National Trust Banks to participate primarily in Fiducia’s activities.
On one Consignment letter On July 17, the groups stated that approval of the waiting applications would set a precedent where custody and payment services become the basis for granting a trust bank charter.
The potential displacement, warns, can create a regulating loophole, which allows non-banking units to access the benefits of a national bank charter without being subject to the full range of supervisory surveillance that applies to traditional banks.
“The appropriateness of Trust Charter for the applicants is an important issue of general politics,” the letter says. “Granting these applications can represent a basic deviation from existing OCC precedence, and the associations are convinced that such a departure requires public efforts.”
The groups urge the existence to delay all decisions until the public has had a chance to review more complete information about the applicants’ business models and the broader consequences of granting such charters.
“A launch would enable time and hopefully sufficient information for the public to meaningfully evaluate the applications and the new questions they present,” the letter notes.
