Trump Administration Approves First Round of Crypto-Focused Banks — WSJ
By Dylan TokarThe Trump administration on Friday blessed plans to launch five new cryptocurrency-focused national banks, part of its push to give the industry broader access to the traditional financial system.Circle and Ripple were among the crypto upstarts that received approval on applications filed with the Office of the Comptroller of the Currency. The OCC, part of the Treasury Department, regulates national banks.A crowd of nonbanks has been knocking at the door of the banking system thanks to President Trump's friendly stance toward the crypto industry and focus on deregulation. Crypto companies and fintechs have applied for special bank charters, while retailers like Amazon and Walmart have eyed expansions of banklike services since Trump's return to office.The conditional approvals by the OCC of Circle's and Ripple's applications will allow them to move forward with building so-called trust banks. Trust banks have traditionally been the purview of insurance companies, asset managers and payroll processors. They differ from full banks in that they generally cannot take deposits or make loans.The applicants have 18 months to raise the capital and build the infrastructure needed to launch a bank, the OCC said. They also will be subject to a final exam from the agency before opening their doors.Circle, Ripple and many of the other companies applying for such charters say having one will allow them to cut out costly middlemen and boost consumer confidence in a range of services. That could include safekeeping digital assets and issuing stablecoins, a cryptocurrency with a fixed value.Banks have been worried in particular about the rise of stablecoins, which could potentially compete with their payment and deposit services if widely adopted by consumers.So far this year, 12 companies had applied for trust charters, more than any in at least the preceding eight years, according to data compiled by Klaros Group, a financial-services advisory firm.Paxos, BitGo and Fidelity also received approval Friday. In their cases, the OCC approved applications to convert pre-existing state charters to national trust charters.Banking lobby groups had written letters opposing the trust charter applications, arguing that granting them could threaten the stability of the financial system.On Friday, the Banking Policy Institute said the OCC's approvals left "substantial unanswered questions," including "whether the requirements the OCC has outlined for the applicants are appropriately tailored to the activities and risks in which the trust will engage."Write to Dylan Tokar at [email protected]