As part of the ongoing effort focused on integrating digital assets into the traditional banking system, the Office of the Comptroller of the Currency (OCC) is advancing rules that would expand the scope of national trust bank charters. This move, highlighted in recent regulatory updates, signals growing acceptance of crypto-focused institutions at the federal level, even as established banks continue to push back against what they see as uneven competition.
Last week, the public comment period closed on the OCC’s notice of proposed rulemaking (NPRM), which updates guidelines under 12 CFR 5.20.
The proposal broadens the definition of permissible activities for national trust banks, shifting language from strictly “fiduciary activities” to “operations of a trust company and activities related thereto.”
The OCC's push for crypto bank charters shows the banks continuing to object to crypto: CSBS slams it as 'Franken-charters' creating unfair competition. Insights from @OliverWyman’s Joseph Cox on BHC Act avoidance. #Crypto #Regulation via @ForbesCrypto https://t.co/iiIXKHc8kc"
— Jason Brett (@RegulatoryJason) February 18, 2026
This change would formally allow these entities to engage in both fiduciary and certain non-fiduciary services—such as digital asset custody—without requiring full banking powers like deposit-taking.
The OCC emphasized that its supervised trust banks already manage nearly $2 trillion in assets, simply codifying practices that have long existed.
The development follows conditional charter approvals in December 2025 for subsidiaries linked to major crypto players including Ripple, Circle, Paxos, BitGo, and Fidelity.
These approvals appear tailored for custody and related digital asset services. Anchorage Digital Bank, N.A., which received the first federal crypto bank charter in January 2021, already offers institutional clients safekeeping, settlement, staking, and governance participation, serving as a working model for this hybrid approach.
However, the initiative has drawn criticism from the banking sector.
The Conference of State Bank Supervisors (CSBS) submitted a detailed comment letter arguing that the OCC lacks broad authority to create these specialized charters.
CSBS President and CEO Brandon Milhorn described the proposed entities as “Franken-charters,” warning they stitch together elements of deposit-taking banks, fiduciary trusts, and bankers’ banks in ways Congress never intended.
“The OCC does not have blanket chartering authority, as proven time and again by Congress and the courts,” Milhorn stated in an accompanying press release.
The American Bankers Association echoed these concerns, urging regulators to prohibit non-traditional applicants from using the word “bank” in their names to prevent customer confusion.
Joseph Cox, a partner at Oliver Wyman and former head of the Federal Reserve’s Novel Activities Supervision Program, provided deeper analysis on the structural implications.
He pointed out that obtaining an OCC national trust charter allows parent companies to avoid the stringent requirements of the Bank Holding Company Act (BHCA).
Traditional bank parents face tight limits on commercial activities and affiliate transactions to maintain separation between banking and commerce.
Crypto firms, by contrast, can operate under lighter oversight, raising questions of competitive fairness even when applicants are themselves financial institutions.
This regulatory evolution aligns with broader U.S. efforts to mainstream crypto, including the approval of spot Bitcoin ETFs and emerging stablecoin frameworks.
Recent CFTC guidance further supports the trend by permitting national trust banks’ payment stablecoins to serve as margin collateral in derivatives markets.
Industry observers anticipate expanded use of tokenized securities, money market funds, and bitcoin within futures and options trading, potentially bringing greater efficiency while introducing new risks around valuation, liquidity, and systemic contagion.
As regulators continue calibrating the balance between innovation and stability, traditional banks remain vocal in their resistance.
Their objections underscore ongoing tensions over risk management, consumer protection, and a level playing field in an increasingly digitized financial landscape. Whether these “crypto banks” ultimately strengthen or fragment the system will depend on how supervisors enforce safeguards in the months ahead.
