U.S. Regulators Give Five Crypto Firms a Roadmap to Become Trust Banks — What That Means for Custody and Stablecoins

A conditional green light arrives — and it matters now

The Office of the Comptroller of the Currency (OCC) has granted conditional approvals that let five crypto firms move toward becoming national trust banks. The move is a meaningful step because it pushes crypto custody, stablecoin backing and client protections closer to a familiar, federally supervised banking model. For markets and institutional players, that can reduce some of the uncertainty around who holds and backs customer assets in the U.S.

This is not final approval. The OCC’s notices are conditional: they outline what each firm must do to meet federal rules before it can operate as a national trust bank. Still, the decision changes the conversation. Firms that win trust charters can hold customer assets more directly, offer custody under a recognized federal framework, and potentially clear the way to provide services that look and feel more like traditional deposit custody than the fragmented offerings that exist today.

Which firms were named and what a trust-bank conversion really means

The OCC’s announcements named five firms, including Ripple, Circle and BitGo, and identified a Fidelity affiliate among the applicants. Each notice is tailored to the applicant, but the shared theme is the conversion from a crypto services company into a federally chartered trust bank.

Converting to a national trust bank is about two things: custody and supervision. As trust banks, these firms would be able to hold assets on behalf of customers under a federal charter. That creates a clear legal framework for custody, and it brings regular federal oversight — capital checks, liquidity rules, governance tests and operational controls — that non-bank crypto custodians do not face the same way today.

The OCC’s conditional approvals come with caveats. Applicants must meet specific capital and liquidity requirements, show robust anti-money-laundering controls, and prove they can separate client assets from the firm’s own holdings. The notices also require clear plans for consumer protection, operational resilience and safe recordkeeping before final charters are issued.

Why markets should care: custody, stablecoins and a credibility boost

On a practical level, federal trust charters change the counterparty picture for institutions. Right now, many firms stash assets with a patchwork of custodians, some regulated and some not. A trust bank that can offer custody under a federal framework reduces counterparty risk for traders, funds and corporate treasury teams that want a single, clearly supervised place to park crypto assets.

Stablecoin markets could be the clearest near-term beneficiary. Circle, the issuer of the USDC stablecoin, moving toward a trust charter would make it easier for counterparties and large holders to demand that reserve assets live in accounts with federal oversight. That could lift confidence in reserve practices and tighten the link between stablecoins and regulated custody providers.

More broadly, the OCC’s action sends a signal to other firms and regulators: the U.S. is willing to let crypto players use a bank charter route, provided they meet bank-level rules. That may nudge more crypto firms to pursue charters and prompt states and other federal agencies to align their supervision. The likely result is a more consolidated U.S. market for custody and regulated services — and potentially higher barriers to entry for smaller players.

How investors and traders could feel the impact

Token markets tied to these firms could react on confidence. USDC stands to gain from tighter reserve and custody controls if Circle secures a national charter — that can reduce perceived tail risk for large holders. For tokens like XRP, associated with Ripple, the effects are less direct but still meaningful: improved regulatory footing for the company that supports important payment rails could encourage more institutional integration over time.

Custody pricing, trading liquidity and institutional flow patterns may shift. Institutions typically pay for reduced counterparty risk; they may accept higher custody fees in exchange for federal oversight. That would reward larger custodians that can scale trust-bank operations and could squeeze smaller custodians or offshore players. Liquidity could concentrate where regulated custody and settlement are strongest, changing venues and counterparties for big trades.

Investors should view these moves as positive for firms that can meet banking standards, but the benefits are not guaranteed. The approvals reduce some risks while exposing firms to bank-style supervision, which brings costs and compliance burdens that can compress margins.

Firm and market reactions: cautious optimism

Firm statements were measured. A spokesperson for one applicant described the OCC notices as an “important step toward offering federally supervised custody and payment services in the U.S.,” highlighting consumer protection and institutional readiness. The OCC framed the approvals as conditional and supervisory in nature, emphasizing that firms must demonstrate they meet banking standards before any final charter is granted.

Market participants welcomed the clarity. One trading desk head said the move “reduces a major unknown” for institutional clients thinking about holding large stablecoin balances. An independent regulatory analyst noted that, while the approvals are meaningful, “the true test comes during the compliance build-out. Meeting bank rules is often harder and more expensive than firms expect, and that can reshape business models.”

What’s next and where the risks lie

These conditional approvals are a multi-step process. Applicants must satisfy the OCC’s conditions, which include capital, governance and compliance milestones. Only after the OCC signs off on those items will final charters be issued. Timing will vary, but expect months of audits, third-party reviews and ongoing regulatory engagement.

The biggest risks are legal and operational. Pending or past litigation, gaps in anti-money-laundering programs, or shortfalls in reserve practices could stall or scuttle final approval. Even with charters, firms will face stricter supervision that may reduce margins or force product changes. For investors, the prudent view is this: the OCC approvals lower some tail risks but introduce a new set of banking risks that could alter valuations and strategy over time.

Sources

• coindesk.com