Big banks in the U.S. are not staying quiet anymore. They’re calling out crypto firms for trying to sneak into the regulated financial world using national trust-bank charters, and they’re pissed.
Two trade group giants, the Bank Policy Institute (BPI) and Independent Community Bankers of America, just told the Office of the Comptroller of the Currency (OCC) to kill Coinbase’s bid for one of these charters.
And it’s not just about Coinbase. The BPI already shot off letters on October 31 opposing similar moves from Ripple, Circle, Paxos, and a few more.
This isn’t some turf war over licenses. It’s about power. These charters would let crypto platforms gain federal legitimacy without actually following the same strict rules traditional banks follow.
And banks are freaking out. They believe crypto platforms are looking for a shortcut into the heart of U.S. finance. By choosing narrow trust charters, these platforms are trying to dodge full banking supervision, all while reaping the benefits of a bank title.
Banks accuse crypto of trying to game the system
Old-school lenders say this is a backdoor move. They claim crypto firms want to wear the bank badge without carrying the regulatory burden.
They fear it’ll destroy the whole point of having charters if anybody with a wallet app can get one and start acting like a bank. The deeper concern is that crypto is rewriting the rules without asking.
Comptroller of the Currency Jonathan Gould didn’t seem fazed. He fired back Tuesday at the Clearing House annual conference in New York, saying the trust charters actually allow the OCC to put crypto firms under federal oversight.
According to him, it’s better to have these companies inside the system than outside it. “I have no ability to supervise or regulate nonbanks,” Gould said. “And so the only way I can possibly ensure a level playing field is for those who voluntarily come into this system or want to come into the system.”
The banks aren’t buying it. They argue that even if the charters bring crypto firms closer to regulators, the playing field is still tilted. Especially when companies like Coinbase advertise a 3.85% return on USDC holdings, a stablecoin issued by Circle.
Under the Genius Act, which just passed as the first federal law setting rules for stablecoins, issuers can’t offer interest. But platforms tied to them apparently still can.
Crypto defends its position and slams back
To critics, that 3.85% looks a lot like interest. And if it walks like a deposit and talks like a deposit, it could pull money out of the traditional banking system. That’s what’s got the banks sweating, a slow bleed of customer funds into stablecoin-based returns, with none of the protections or rules they’re stuck with.
So far, the OCC hasn’t approved any new trust charters this year. But pressure is building. With the Genius Act now law, and incentives from crypto platforms already live, both sides know the next decision could reset how finance works in this country.
Bankers say the regulatory gap is being exploited. Trust charters could let crypto companies handle custody and payments while skipping over the tighter controls real banks face. But crypto leaders aren’t backing down. They say trust companies already follow laws, including a ban on lending, which lowers the risk.
Blockchain Association CEO Summer Mersinger blasted the banks. “It’s disappointing that the Bank Policy Institute predictably continues to resist competition and innovation in financial services,” she said. “Rather than defending the status quo, it’s time to drain the regulatory moat that protects traditional finance from new entrants.”
Then there’s the Trump factor. Since Donald Trump returned to the White House, his administration has peeled back rules and given the crypto space more room to grow. Just last month, the Federal Reserve hosted a payments innovation conference, sending a loud message that the crypto crowd is no longer on the sidelines.
Fed Governor Christopher Waller made it clear: “This is a new era for the Federal Reserve in payments, the defi industry is not viewed with suspicion or scorn. Rather, today, you are welcomed to the conversation on the future of payments in the United States and on our home field, something that would have been unimaginable a few years ago.”