Banking lobby calls for halting of crypto bank licenses

Five of the US’s top banking and credit union associations have called for the Office of the Comptroller of the Currency (OCC) to hit pause on decisions around banking license applications made by cryptocurrency firms, due to concerns about the crypto industry’s approach to fiduciary duty. 

“[We] believe that there are significant policy and legal questions as to whether the applicants’ proposed business plans involve the types of fiduciary activities performed by national trust banks,” the American Bankers Association (ABA) and four other banking and credit union trade groups wrote to the OCC. 

“Given these substantial concerns, and the policy, legal and commercial implications that chartering the applicants would have for the banking system, [we] urge the OCC to postpone consideration of the applications. The delay should continue until such time as the OCC has released enough information concerning the applicants’ intended business plans.” 

The letter comes after, in recent weeks, digital asset firms including Circle, Ripple and Fidelity Digital Assets have applied for banking licenses with the OCC, which would essentially allow the firms to be their own banks. 

The ABA claims that decisions to grant banking licenses to these firms “would represent a fundamental departure from OCC precedent”. 

“The public portions of the applications do not allow for meaningful public scrutiny, and broader change to OCC policy with respect to trust activities requires public scrutiny,” the ABA added.