Why trust charters brought crypto companies into the fold

• Key insight: Trust charters offer simpler nationally applicable regulatory structure and preemption, without things like bank capital, deposit insurance or consolidated supervision.
• Supporting data: More than a dozen firms have applied for national trust charters, and the OCC has approved at least nine since the beginning of the second Trump administration. 
• Expert quote: "That idealism was, frankly, always bullshit. In the middle of 2021, I was like, 'Yeah, they're just trying to merge with digital finance.' That narrative has always been a smokescreen for all but a few very dedicated cyber libertarians." — Hilary Allen, American University's Washington School of Law 

The wave of applications by digital asset firms for national trust charters in recent years — reversing years of perceived resistance by the crypto industry to traditional finance — is a confluence of several factors, experts say, including more benefits to obtaining charters, a crypto-friendly regulatory environment and a softening of anti-establishment attitudes.

Since the beginning of 2025, more than a dozen firms have applied for national trust charters with the OCC, aided by the publication of an interpretive letter from 2021 that allows national trust companies to engage in standalone nonfiduciary custody. At least nine applications have already been conditionally approved. 

Banks have raised concerns that applicants — including some of the largest crypto exchanges — could compete directly with traditional lenders for customer funds, but without bearing the cost and regulatory burden of full bank oversight.

Democratic lawmakers, even traditional banking industry critics like Sen. Elizabeth Warren, D-Mass., have found commonality with banks on this issue. In May, Warren sent a letter to Gould arguing that granting such charters to crypto firms violates the National Bank Act and puts consumers at risk. Among other differences, trust banks are not insured like traditional banks. 

"(S)ince December 2025, you have approved at least nine national trust charters for crypto companies that intend to engage in activities that appear to go far beyond the narrow set of activities permitted by law. These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank," Warren wrote. "Your decision to facilitate this regulatory arbitrage not only conflicts with federal law, it also poses serious risks to consumers, the safety and soundness of the banking system, and the separation of banking and commerce." 

Shortly after, the Digital Chamber of Commerce, a trade group representing crypto firms, responded by defending what they believe is the agency's broad latitude to consider these applications, within existing banking laws. They said the "characterization of these approvals as 'apparent violations' of the National Bank Act misreads both the statute and the OCC's longstanding charter authority."

"The OCC is expressly empowered under [chartering provisions of the National Bank Act] to charter companies whose operations are limited to those of a trust company and activities related thereto," the Digital Chamber argued. "The OCC has the expertise and authority to determine what activities are sufficiently related to trust functions in a modern financial context and has a long history of making such determinations, adapting its chartering authority as financial services have evolved, from the rise of interstate banking to the advent of electronic payments."

Arthur E. Wilmarth, professor emeritus of law at George Washington University Law School, argued in a recent policy brief that Congress intended national trust banks to engage in strictly fiduciary activities. He says that the OCC's approval of charters for such firms violates the legal basis of the charters, their permissible activities under the law and restrictions on their ability to take deposits.

Comptroller of the Currency Jonathan Gould, speaking at a fireside chat at Semafor's Banking on the Future conference in May, argued that the wave of applications was a result of "pent-up demand." Gould, who authored the 2021 memo while serving as OCC general counsel during the first Trump administration, also contended that new leadership at the prudential regulators has hastened applications reviews, making the hassle of applying appear worth it for the first time in years. When asked if he worried about a lawsuit from the banking industry, he argued the agency was well within its legal ambit. 

"The FDIC deposit insurance application process has been so laborious and so slow — meaning the chartering authority will make a decision, and then the applicant is still waiting and waiting and waiting to see whether or not the FDIC is going to grant deposit insurance application," he said. "I'm confident that we have an excellent litigation team at OCC, and I'm confident that we have full legal authority to do things that we're doing."

Crypto firms and traditional finance firms are often discussed as ideologically separate and unique entities. The seminal cryptocurrency text, Satoshi Nakamoto's white paper, argued for building an electronic payment system "based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party."

But that's changed as institutions have increasingly positioned themselves as centralized gatekeepers offering customers access to blockchain-traded assets. As stablecoins, payments, and tokenized assets increasingly mingle with mainstream financial infrastructure — helped by a more favorable regulatory and legislative backdrop — the charter allows them to plug into the Fed's rails, reduce state-by-state friction, and gain institutional legitimacy.

Many of the firms gaining trust licenses previously operated under a patchwork of state money transmission licenses. Patrick Haggerty, a partner with consulting firm Klaros, said operating with a federal charter allows crypto firms to enjoy a simpler, more uniform regulatory regime — and, in some cases, the preemption of state laws by federal laws.

"You can essentially replace that patchwork regulatory regime with something that is authorized at the federal level and gives you the ability to operate nationally under one set of standards, answering to one regulator," Haggerty said. "It provides some efficiencies both from a cost perspective, but also in terms of kind of product development and things where you may have to iterate different variations of the product for certain states, whereas under a federal license you can do that uniformly for the most part across state lines."

Another major benefit of a federal charter is access to the Federal Reserve system, including the ability to apply for a master account at the central bank, which allows direct access to core payment infrastructure rather than routing through intermediary banks. It also opens the door to membership in card networks, which could allow firms to issue cards, acquire merchants and acquire Bank Identification Numbers.

"Having a bank charter gives you the possibility of going and getting a master account with the Federal Reserve, which allows you to basically disintermediate correspondent banks that you may have needed to rely on in order to move money through the bank payment networks," Haggerty said. "Things like getting principal membership in one of the card networks like Visa or Mastercard is traditionally something that was limited for banks, there's some examples of nonbanks, particularly in crypto space, that have obtained membership, but I think you can get basically clear full membership for the most part."

With a trust charter in hand, companies can be treated as banks for certain purposes without necessarily becoming banks under the Bank Holding Company Act, which would impose consolidated supervision and restrict their nonbank commercial activities.

"The National Trust Bank gives you a vehicle to do a lot of banking activity without sort of becoming a full-blown bank," Haggerty said. "I think some people who are nonbanks that want a bank are attracted to a nonbank bank … because it allows them to continue to be sort of capital light, technology forward."

New legislation under the GENIUS Act also establishes a federal framework for stablecoins. If firms exceed certain thresholds related to the size of their operations under that regime, federal oversight becomes unavoidable.

"The ability to get these charters opened up partly because of a change in regulatory attitude, and partly because of the GENIUS Act," Haggerty said. "It made it possible to move to something that's more fit for purpose for what they want to do, and broader in terms of its authorities."

"If you're a state money transmitter, you still rely on banks for money movement, you rely on banks to hold insured deposits, sponsor you into the payment and card networks … so it was never viewed as ideal," Haggerty continued. "I think GENIUS is a big kind of propellant to making this path clear enough for large companies to feel like they can pursue it without taking outsized risk."

Federal preemption over state law allows firms to enjoy centralized supervision while maintaining nationwide reach, says Hilary Allen, professor of law at American University's Washington College of Law.

"The national charter, you can sort of see why they want it, because of the preemption that comes with it, because of the standardization of being able to comply with one set of rules instead of 50 sets of rules," Allen said. "They don't want to have to become fully regulated banks with all the bank regulation that comes with it … you are allowed to have your affiliates engage in all kinds of non-financial activities, so it sort of abrogates the separation of banking and commerce that we are so used to."

Cryptocurrency

Is the OCC stretching trust charters too far?

January 30, 2026 6:00 AM

By Ebrima Santos Sanneh

The Digital Chamber, when reached for comment, pushed back on the idea that seeking charters abandons decentralization or crypto's original ethos. In their telling, establishing crypto as a regulated product category can coexist with permissionless infrastructure rather than replacing it.

"The pursuit of a charter is not at odds with innovation. Some participants are focused on decentralized protocols, while others are building regulated financial products and services," the Chamber said. "Firms pursuing charters are largely not the same ones building permissionless infrastructure and conflating the two obscures more than it clarifies. The pursuit of a charter is not a repudiation of decentralized innovation; it's a different product category serving a different market."

Instead of impersonating banks, the Chamber envisioned regulated financial services and decentralized infrastructure developing side by side, with increasing linkages.

"We are in the next phase of market maturation," the Chamber said. "Historically, transformative technologies are rarely adopted by replacing existing systems overnight; they tend to be integrated over time in ways that improve efficiency, resilience, and access. The technology is beginning to reshape existing financial infrastructure from within."

Allen argues that crypto exchanges' interest in becoming more mainstream has been clear for years.

"That idealism was, frankly, always bullshit," Allen said. "In the middle of 2021 I was like, yeah, they're just trying to merge with digital finance, that narrative has always been a smokescreen for all but a few very dedicated cyber libertarians."