The American Bankers Association (ABA) is making a forceful plea to the Office of the Comptroller of the Currency (OCC), urging a significant pause in the approval of national trust bank licenses for companies engaged in crypto assets and stablecoins. This intervention comes amidst growing concerns over an ill-defined regulatory landscape and the potential risks posed by rapid expansion in this nascent sector, particularly following recent conditional approvals by the OCC.
Regulatory Uncertainty and Systemic Risks
The core of the ABA's argument hinges on the profound regulatory uncertainty currently surrounding crypto and stablecoin activities. In a recent letter to the OCC, the banking trade group highlighted that current and prospective applicants face unresolved oversight from various federal and state regulators, particularly with forthcoming regulations under the GENIUS Act still taking shape. The ABA firmly believes the OCC should not proceed with applications where an institution's complete regulatory obligations remain undefined. The association further warned that national, uninsured crypto-centric trusts present significant unaddressed issues across safety and soundness, operational resilience, and resolution planning. Specific concerns include the segregation of client assets, potential conflicts of interest, and critical cybersecurity vulnerabilities inherent in these novel operations.
Calls for Caution and Clearer Standards
Beyond the immediate risks, the ABA cautioned that national trust licenses could inadvertently become a loophole, allowing companies to sidestep registration and scrutiny from critical agencies like the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) when their activities would otherwise trigger securities or derivatives regulation. To mitigate these dangers, the ABA implored the OCC to exercise "patience," suggesting traditional timelines are ill-suited for these complex applications. They called for increased transparency regarding how the OCC calibrates capital, operational, and resilience standards for crypto-related conditional approvals. Furthermore, the association advocated for stricter naming conventions, proposing that limited-purpose trust banks not engaged in traditional banking should be barred from using the word "bank" in their names, thereby reducing consumer confusion about the insured status and security of their offerings.
