US Banks Weigh Lawsuit Over Crypto Trust Charters

A major U.S. banking lobby group is weighing potential legal action against the Office of the Comptroller of the Currency (OCC) over its decision to grant national trust bank charters to cryptocurrency companies, a move that has intensified tensions between traditional financial institutions and the digital asset industry.

According to reports citing sources familiar with the discussions, the Bank Policy Institute (BPI), which represents several of the country’s largest banks, is considering suing the federal regulator. The group argues that the OCC ignored earlier warnings from banking organizations and state regulators when it moved forward with approving licenses for crypto firms.

Dispute Over Crypto Bank Licenses

The controversy centers on the OCC’s decision to grant conditional national trust bank charters to a number of digital asset companies under the leadership of Comptroller Jonathan Gould, who was appointed during the administration of President Donald Trump.

Among the firms that have received preliminary approvals are Ripple, BitGo, and Paxos. Several other crypto companies are also pursuing similar charters.

If finalized, these licenses would allow digital asset firms to operate as federally regulated trust banks, providing services such as asset custody and safekeeping without becoming full-service commercial banks.

Banking industry groups argue that the approach risks blurring the legal distinction between traditional banks and non-bank financial institutions.

Concerns From Banking Groups

The Bank Policy Institute previously urged the OCC to reject charter applications from crypto companies, including firms such as Ripple and Circle. In an earlier statement, the organization warned that allowing crypto firms to access the national banking charter while operating under what it described as lighter regulatory standards could weaken safeguards within the financial system.

The group also argued that such approvals might undermine the credibility of the national banking charter by enabling companies to offer bank-like services without being subject to the same level of oversight as traditional banks.

Wider Industry Pushback

Similar concerns have been raised by the Independent Community Bankers of America (ICBA), which represents thousands of smaller lenders across the United States. The organization has called on the OCC to reconsider or withdraw its proposal to grant trust bank charters to digital asset companies.

Despite the criticism, the regulator has continued reviewing applications from crypto firms seeking entry into the federally regulated banking system.

Political Scrutiny

The issue has also drawn attention from lawmakers. Earlier this year, World Liberty Financial, a firm linked to former President Donald Trump, submitted its own application for a trust bank charter.

The application prompted scrutiny from Senator Elizabeth Warren, who questioned whether potential conflicts of interest could arise from such approvals.

During a Senate Banking Committee hearing, Gould said the OCC would continue evaluating the application according to the agency’s standard procedures.

Growing Clash Between Banks and Crypto Firms

The potential lawsuit highlights the growing friction between traditional banks and cryptocurrency companies as digital asset firms push for deeper integration into the regulated financial system.

If the Bank Policy Institute proceeds with legal action, the case could become a key test of how U.S. regulators define the role of crypto companies within the country’s banking framework.