The Office of the Comptroller of the Currency (OCC) has conditionally approved the national trust bank license applications for five cryptocurrency-related institutions: Ripple, BitGo, Digital Assets, Paxos, and Circle.
(Background: Is Ripple introducing staking? CTO discusses “Dual-Layer Consensus Model”: Adding a DeFi yield layer to XRP)
(Additional background: Ripple applies for a US banking license! Stablecoin RLUSD fully compliant route “Reserves in Federal Reserve account”)

Table of Contents

• What does “conditionally approved” mean?
• The scope of the license
• Far-reaching positive impacts

The Office of the Comptroller of the Currency (OCC) has currently conditionally approved the national trust bank license applications of Ripple, BitGo, Digital Assets, Paxos, and Circle. This decision marks a further open attitude by the OCC within the digital asset regulatory framework, reflecting a continued friendly shift in the US regulatory environment towards the crypto industry, which will help crypto companies integrate more deeply into the traditional financial system.

What does “conditionally approved” mean?

“Conditional approval” is an initial stage of OCC licensing approval. After reviewing the application, if the OCC believes the company generally meets requirements such as capital adequacy, risk management framework, and business plans, it can grant this approval. However, this is not the final permit; the company must complete specific conditions within a set period (usually 6 to 12 months), such as strengthening compliance systems, supplementing capital, or passing stress tests. Once all conditions are satisfied, the OCC will issue an unconditional national trust bank license, and the company can officially operate.

Scope of the license

Upon obtaining the final license, these institutions will transform into federally regulated trust banks, with core powers including:

Firstly, acting as fiduciaries to manage client assets, securely custody digital assets such as reserves for stablecoins. This will significantly boost investor confidence and attract more pension funds or corporate clients to participate in the crypto market.

Secondly, they can provide payment settlement services, supporting blockchain-based cross-border payments and clearing, potentially reducing transaction costs by 30% to 50%.

Furthermore, these trust banks can apply for primary accounts with the Federal Reserve System, directly accessing Fedwire or CHIPS, speeding up fund flow, and further bridging crypto with traditional finance.

However, it is important to note that this license also has clear restrictions: unlike full-service commercial banks, trust banks are not permitted to accept deposits or issue loans; their scope is limited to custodial and fiduciary activities. They are also required to comply with OCC’s digital asset guidance, such as asset segregation and risk disclosure requirements.

Far-reaching positive impacts

This approval is expected to bring multiple positive effects. Firstly, for these institutions, it enables immediate expansion of core businesses, which is expected to drive growth in the market value of related stablecoins and attract more institutional funds into the crypto sector. Secondly, for the industry as a whole, it symbolizes a deep integration of crypto and traditional finance, which could stimulate the development of “DeFi 2.0,” combining decentralized finance with regulated custody, reducing systemic risk. In the long term, under the US “crypto-friendly” policy support, this move could boost the total market capitalization of crypto assets and encourage more companies to apply for similar licenses, further promoting the integration of the two major financial systems.

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Tags: BitGoCIRCLEOCCPaxosRippleTrustBankingLicenseTraditionalFinanceIntegrationCryptoDigitalAssetsStablecoinsUSRegulation