The U.S. Office of the Comptroller of the Currency (OCC) has granted conditional approvals for five bank charter applications from notable firms in the digital assets space. This decision paves the way for firms such as BitGo, Fidelity Digital Assets, and Paxos to transition from state-level trust companies to federally chartered national trust banks. Furthermore, Circle and Ripple have also received conditional approvals for their respective applications.
“New entrants into the federal banking sector are good for consumers, the banking industry and the economy,” stated Jonathan Gould, the Comptroller of the Currency. He further noted, “The OCC will continue to provide a path for both traditional and innovative approaches to financial services to ensure the federal banking system keeps pace with the evolution of finance and supports a modern economy.”
Approval letter for Circle’s national trust bank charter application
Friday letter approving Circle’s national trust bank charter application. Source: OCC
These five crypto companies are among many vying for the OCC’s regulatory approval to broaden their foothold in the banking landscape. Notably, the cryptocurrency exchange Coinbase has expressed its intentions to apply but stated it has “no intention of becoming a bank.”
Although the specifics of each applicant’s letter varied, their common goal is to leverage the charters for offering digital asset custody services to clients. Paxos plans to allow stablecoin issuance under its charter, while Ripple clarified that their charter would “not be a stablecoin issuer” for its U.S. dollar-pegged coin, RLUSD (More info on RLUSD).
“Paxos’ federally regulated platform will allow businesses to issue, custody, trade and settle digital assets with clarity and confidence,” remarked Paxos in a statement last Friday.
BitGo on Track for Public Offering
In related developments, the OCC’s approval coincides with the U.S. Securities and Exchange Commission’s examination of BitGo’s bid for an initial public offering. The firm is seeking to list its shares on the New York Stock Exchange, reporting close to $90 billion in assets under custody. Conversely, Monica Long, president of Ripple, indicated in November that the firm does not plan to pursue an IPO, and Paxos has also yet to announce similar intentions. On the other hand, Circle executed its IPO in May on the New York Stock Exchange.
