The Bank Policy Institute (BPI), an industry group comprising giants like JPMorgan Chase, Goldman Sachs, and Bank of America, is considering legal action against the Office of the Comptroller of the Currency (OCC) over its issuance of national trust bank charters to crypto and fintech companies. This move is seen as a strong response from the traditional financial system to the expansion of emerging crypto institutions.
The Conference of State Bank Supervisors (CSBS), representing financial regulators from all 50 US states, has also indicated that litigation remains a possibility. CSBS official Brandon Milhorn noted widespread industry concerns that the OCC is overstepping its authority by expanding federal regulatory powers, particularly by granting federal endorsement to crypto firms without establishing capital adequacy ratios, deposit insurance, and compliance obligations equivalent to those of traditional banks.
In the past 83 days, 11 institutions have submitted applications for national trust bank charters. Among them, Morgan Stanley has applied to establish an independent entity named "Morgan Stanley Digital Trust" to provide crypto asset custody, staking, and trading services. Zerohash submitted its application on February 27, 2026, marking an acceleration in crypto institutions seeking federal regulatory status.
The BPI's core legal argument focuses on OCC Interpretive Letter 1176, issued in 2021. This letter expanded the scope of national trust banks, allowing them to engage in non-traditional trust functions such as crypto asset custody, staking, and stablecoin reserve management. The BPI argues that this action circumvented the statutory “notice and comment” procedure, is procedurally flawed, and may constitute a violation of the Administrative Procedure Act (APA).
A key point of contention is deposit insurance. Unlike traditional banks insured by the FDIC, crypto institutions with national trust charters are not required to carry federal deposit insurance, meaning customer assets are not eligible for up to $250,000 in federal protection. The BPI warns that this regulatory arbitrage could create systemic risk, and a run on these institutions could directly impact user confidence and financial stability.
The OCC's new rule officially took effect on April 1, 2026, further confirming that trust banks can offer a diverse range of digital asset services. Although the BPI has not yet made a final decision on whether to file a lawsuit, the implementation of the new rule may accelerate the pace of legal action. If a lawsuit is filed, its goal would not only be to revoke existing charters but also to redefine the boundaries of federal regulatory authority in the crypto space.
This regulatory battle is not just about the operating rights of a few crypto companies; it could reshape the regulatory framework for digital assets in the US financial system.