The Situation

A U.S. banking lobby group representing the largest banks is weighing litigation against the OCC over its ongoing approval of national trust bank charters for crypto and fintech firms, per The Block and follow-on coverage (Stocktwits). The immediate trigger is the perception that the OCC is letting crypto-native firms access bank-adjacent privileges—especially payments connectivity—without the full bank regulatory stack and balance-sheet obligations.

This comes after the OCC granted conditional approvals on Dec. 12, 2025 to Ripple, Circle, BitGo, Fidelity Digital Assets, and Paxos (per the reporting), and after Kraken reportedly received approval for a “limited” federal master account last week—raising the temperature around who gets to plug into the money rails and under what prudential terms.

The delta versus prior skirmishes: this is no longer just comment letters and Hill messaging. It’s the banking sector signaling it may try to stop the charter pathway in court, not simply slow-walk it in supervision.

The Mechanism

• What banks are really defending is the perimeter: A national trust charter can confer a bank-like regulatory identity for custody/settlement activities while avoiding parts of the full-service bank model (notably, the economics and constraints that come with insured deposits and broad lending powers).
• Master account access is the choke point: If crypto-chartered entities can access central bank and/or bank payment plumbing more directly, they can compress the role of incumbent banks as gatekeepers for settlement, custody cash, and intraday liquidity.
• Counterparty substitution risk: Treasurers, asset managers, and corporates that currently rely on money-center banks for custody + cash management could route certain workflows (stablecoin issuance/redemption, tokenized collateral movements, prime-broker-like custody) through newly chartered specialists.
• Stablecoin plumbing sits in the blast radius: Circle/Ripple-type applicants are not just “crypto firms”; they are dollar-rail operators. A charter plus cleaner access to payment networks strengthens their ability to scale issuance/redemption and institutional distribution.
• Tokenized RWA settlement optionality increases: If chartered crypto trusts can be treated as regulated nodes in settlement chains, they become natural service providers for on-chain Treasuries, money-market-like tokens, and tokenized collateral, especially where delivery-versus-payment is being productized.
• Second-order effect: litigation itself becomes a gating factor: Even if a lawsuit fails, it can slow supervisory momentum, increase compliance conservatism at partner banks, and freeze some integrations (especially around payments and custody cash) while facts are litigated.

The State of Play

Market Position

Big banks are in a bind: they are simultaneously building digital-asset infrastructure (tokenized deposits, on-chain repo/collateral, DLT settlement experiments) and trying to prevent a scenario where crypto-native firms get regulatory equivalence and rails access without the incumbent cost base. The competitive fault line isn’t “crypto trading.” It’s the unbundling of the bank stack: custody + payments + settlement + compliance as modular services that can be delivered by a narrower charter.

If the OCC charter lane stays open, expect more “barbell” outcomes: (1) large banks deepen permissioned networks and bank-led settlement constructs; (2) chartered crypto trusts become regulated endpoints for stablecoin and tokenized-asset flows. The stress point will be interoperability—who sets the standards for identity, transfer restrictions, finality, and dispute resolution across these endpoints.

Regulatory Landscape

The fight is about which regulator defines the prudential perimeter for crypto-finance. The OCC’s trust charter approach effectively expands the set of federally supervised entities that can do core financial-market functions (custody/settlement) without becoming full-service insured depositories. Banks argue that this creates an uneven playing field and potential safety-and-soundness gaps; crypto applicants argue it’s a lawful pathway to become supervised and to operate within a clearer framework.

Watch for three regulatory “tells” if this escalates: (1) whether the OCC tightens conditions on charter approvals (capital, liquidity, resolution planning, activity limits); (2) whether the Fed hardens its stance on master accounts for novel charters; (3) whether Congress tries to codify or restrict these charter lanes in parallel with stablecoin and market structure bills.

Key Data

• 5 firms reportedly received conditional OCC charter approvals on Dec. 12, 2025: Ripple, Circle, BitGo, Fidelity Digital Assets, Paxos (The Block).
• Kraken reportedly received approval for a “limited” federal master account last week (per Stocktwits’ summary of the reporting).
• Bank opposition is being coordinated through a banking lobby group (largest banks) and echoed by the Independent Community Bankers of America representing ~5,000 smaller lenders (per The Block).
• The contested instrument is the national trust bank charter (federal trust charter), not a state trust license—i.e., the dispute is about federal preemption and perimeter-setting.
• The commercial center of gravity is payments + custody (rail access), not lending—this is why stablecoin issuers and custodians are the focal applicants.

What’s Next

The near catalyst is whether the banking lobby moves from “weighing” to filing, and—equally important—whether the OCC responds by pausing approvals or by reaffirming the charter lane with tightened conditions. In parallel, watch master-account and payment-network access decisions: even with an OCC charter, rail connectivity determines whether these entities become true settlement nodes for stablecoins and tokenized RWAs—or remain supervised custodians with constrained reach.

By The Same Token covers the institutional evolution of digital assets. For questions or tips: reply to this email.

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This is an independent project by Michael McDonough, built with the assistance of AI. Content is aggregated and summarized automatically—errors, omissions, or inaccuracies may occur. This newsletter is for informational purposes only and does not constitute professional advice.