US Banks Challenge OCC Over Crypto Trust Charters
Major US banks, led by the Bank Policy Institute (BPI) and the Independent Community Bankers of America (ICBA), have petitioned the Office of the Comptroller of the Currency (OCC) to reject crypto trust charters sought by platforms such as Coinbase, Ripple, Circle and Paxos. They argue that these charters grant bank-like legitimacy while allowing firms to sidestep lending, deposit and capital reserve rules.
Banks warn high-yield stablecoins like USDC, offering around 3.85%, mimic deposit interest and risk drawing funds away from insured institutions. They urge the OCC to consider the impact on traditional banks and market stability.
The OCC maintains that approving trust charters brings nonbank firms under federal oversight. This dispute unfolds after the Genius Act, which bans stablecoin issuers from paying interest, and amid broader regulatory easing.
Traders should watch the next OCC decision on crypto trust charters. Its outcome will shape stablecoin regulation and impact the stability of the US financial system.
Neutral
The ongoing dispute over crypto trust charters creates regulatory uncertainty for platforms like Coinbase, Ripple, Circle and Paxos. In the short term, unclear oversight may curb stablecoin market growth and investor enthusiasm. In the long term, OCC approval of charters could enhance federal oversight and lend credibility to stablecoins, potentially stabilizing USDC demand. Given these offsetting effects, the direct price impact on USDC is likely neutral as traders await a definitive regulatory outcome.