Bank Lobbying Group in US Considers Suing OCC Over Crypto Trust Bank Charters

The Bank Policy Institute (BPI), a US banking lobby group, is evaluating whether to file a lawsuit against the Office of the Comptroller of the Currency (OCC) over its decision to grant national trust bank charters to several crypto companies. This initiative was spearheaded by former OCC head Jonathan Gould, who, after being appointed during the Trump administration, first approved conditional trust bank charters for crypto firms like Ripple, BitGo, and Paxos. Since then, more crypto companies have applied for similar licenses.

With this charter, these companies can legally conduct fiduciary and asset custody business, essentially possessing some of the functions of traditional banks. However, the BPI has expressed strong concerns, arguing that this lax regulatory approach could lead to regulatory arbitrage—allowing crypto companies to provide bank-like services with lower compliance standards, blurring the legal definition of "bank," thereby undermining the credibility of the national banking system and potentially exacerbating systemic financial risks.

Although the BPI has not formally decided to take legal action, it previously joined several banks in suing the Federal Reserve in late 2024, challenging its stress test framework, which ultimately prompted the Fed to re-examine its policies. Currently, the OCC maintains its position. In a hearing before the Senate Banking Committee, Gould made it clear that the OCC will continue to accept and review relevant applications, indicating a regulatory openness to the institutionalization of crypto financial infrastructure.