WASHINGTON— The American Bankers Association is urging the Office of the Comptroller of the Currency to slow its approval of national bank charters for digital asset firms, warning that key regulatory and insolvency safeguards remain unfinished.
In a comment letter, the banking trade group said the OCC should ensure its supervisory and receivership frameworks are fully capable of handling risks tied to cryptocurrency and stablecoin activities before granting additional charters.
The association pointed to the legislative timeline of the proposed GENIUS Act as a central concern. While the OCC has recently conditioned some charter approvals on applicants’ future compliance with the measure, the ABA said full implementation is likely years away because it would require coordinated rulemaking among five federal agencies, including the Federal Reserve and the Federal Deposit Insurance Corp.
‘Additional Obligations’
The ABA also cautioned that some current or prospective applicants for OCC charters could face additional obligations under securities laws. Depending on their activities, certain firms may need to register with the Securities and Exchange Commission as brokers, investment advisers or investment companies, the group said.
Trust companies seeking to rely on statutory exemptions available to banks must conduct a substantial portion of their business through fiduciary activities, the ABA noted, adding that expanded SEC involvement could blur the longstanding separation between banking and securities regulation.
Criticism of Recent Approach
The trade group criticized the OCC’s recent approach of granting conditional approvals that require applicants to “conform, cease, or divest” operations later to meet anticipated GENIUS Act requirements. Instead, it called on regulators to delay decisions until the applicable legal and supervisory standards are clearly defined.
“ABA strongly encourages OCC to be patient … and allow each charter applicant’s regulatory responsibilities to come fully into view before moving a charter application forward,” the association wrote.
The letter also referenced turmoil in the digital asset sector in 2022, including the failures of FTX and Celsius, arguing those collapses underscored the volatility and operational risks associated with emerging business models.
