WE'RE GOING TO FIGHT FOR THE SECURITY OF THE LICENSE PLATE

Original by ChandlerZ, Foresight News

ACCORDING TO THE GUARDIAN ON 9 MARCH, THE INSTITUTE OF BANKING POLICY (BPI), AN INDUSTRY ORGANIZATION REPRESENTING 40 MAJOR UNITED STATES BANKS, SUCH AS MORGAN CHASE, GOLDMAN SACHS AND CITI, IS SERIOUSLY CONSIDERING PROSECUTING THE UNITED STATES MONETARY SUPERVISORY AUTHORITY (OCC) TO PREVENT THE LATTER FROM ISSUING US BANK TRUST LICENCES TO ENCRYPTED MONEY COMPANIES AND START-UPS IN FINANCIAL TECHNOLOGY. THE CONFLICT BETWEEN TRADITIONAL BANKING AND ENCRYPTION AROUND FINANCIAL ACCESS RIGHTS WILL OFFICIALLY ESCALATE INTO A LEGAL CONFRONTATION ONCE THE LAWSUIT IS SETTLED。

83 days, 11 companies, a license race

The trigger of the event dates back to December 2025. During the same month, OCC granted, once and for all, the trust bank plates of five encrypted original companies, namely, Circle, Ripple, Bitgo, Paxos and Fidelity Digital Assets. This is the first time that federal regulators have issued such licences to encryption companies in equal quantities。

This was followed by a rapid wave of applications. According to FinTech Weekly, in 83 days, 11 companies submitted applications for trust bank licences, including Cripto.com, Bridge, Zerohash, etc., encryption and financial technology companies, and traditional financial giants such as Morgan Stanley. In February 2026, Cripto.com was granted conditional approval, about four months before his application was submitted。

Even more controversial is the fact that World Liberty Financial, an encryption company linked to the Trump family, also submitted an application for a similar licence in January this year to establish World Liberty Trust Company to issue its USD1 stabilization currency directly. Senator Elizabeth Warren, who had pressured OCC on foreign holdings and conflicts of interest in the application, requested that it be set aside, but was rejected by OCC Commissioner Jonathan Gould。

The opposition continues to expand

BPI IS NOT THE ONLY VOICE AGAINST IT. SO FAR, THE OCC POLICY HAS FORMED A MULTI-LAYERED OPPOSITION COALITION.

The Joint Meeting of State Banking Supervisors (CSBS), representing the United States 50 state regulators, has a strong attitude. Its Chairman, Brandon Milhorn, publicly stated that OCC was collating a Franken licence, changing the narrow calibre licence plates originally used for fiduciary management to create a back door to full-scale banking. At the same time, he made explicit reference to the "prosecution is certainly a possibility" and if OCC's concession expands beyond the boundaries of the National Bank Act, the states will consider administrative action and legal means。

THE INDEPENDENT COMMUNITY BANKERS ASSOCIATION (ICBA), REPRESENTING 5,000 COMMUNITY BANKS, ALSO EXPRESSED STRONG OPPOSITION THAT THESE NEW LICENCE HOLDERS WOULD COMPETE DIRECTLY WITH TRADITIONAL BANKS UNDER A MORE LIBERAL REGULATORY FRAMEWORK, CREATING AN UNFAIR MARKET ENVIRONMENT。

THE AMERICAN BANKERS ASSOCIATION (ABA) DIRECTLY REQUESTED OCC TO SUSPEND THE APPROVAL PROCESS。

BPI Chief Executive Officer Greg Baer argued that trust banks do not have to meet the same regulatory and capital standards as federally insured banks, and that the trust licences approved by OCC have far exceeded the statutory and historical purposes of trust bank licences。

Focus of legal disputes: an explanatory letter

The legal core of the conflict is Interpretative Letter 1176 issued by OCC in 2021. The letter redefined the scope of operations of the Trust Bank and substantially eased the threshold for the acquisition of licences by encryption companies and financial technology companies。

It is worth noting that the letter was drafted by Jonathan Gould, then Chief Legal Adviser of OCC, who is now responsible for the implementation of this rule in his capacity as Director of OCC. On 27 February 2026, OCC submitted further amendments to the Rules, which were scheduled to enter into force on 1 April, by converting the fiduciary activities in the licence provisions into the operation of the trust company and related activities. Critics believe that this change in wording will further blur the boundaries of the operations of trust banks。

THE LEGAL ARGUMENTS OF INSTITUTIONS SUCH AS BPI FOCUSED ON THE FACT THAT OCC HAD SUBSTANTIALLY CHANGED THE LICENSING RULES BY INTERPRETING LETTERS AND WORDING, WHILE BYPASSING THE FORMAL RULE-MAKING PROCESS REQUIRED BY THE ADMINISTRATIVE PROCEDURE ACT (APA), INCLUDING PUBLIC CONSULTATION. IF THE ACTION IS INITIATED, THIS PROCEDURAL FLAW WILL BE THE PRINCIPAL DIRECTION OF THE PLAINTIFF ' S ATTACK。

Gould argued that the trust company had long provided both fiduciary and non-trusted hosting services, that the stable currency reserve was a narrow-calibre, segregated, non-credit-created business and that the law required the OCC Director to approve all applicants who met the statutory requirements, regardless of the technology used。

Who has access to the US financial system behind the license contest

On the face of it, the dispute concerns the criteria for approving a licence, and more deeply, the core question of who has the right to enter the United States financial system and by what standards。

Traditional banking is concerned about regulatory arbitrage, and encryption companies and financial science and technology enterprises can operate in 50 states of the United States with a trust licence, providing services such as payment, hosting, stable currency issuance, without having to bear the same capital requirements, consumer protection obligations, and deposit insurance costs as all banks。

THE LOGIC OF THE ENCRYPTION INDUSTRY IS EQUALLY CLEAR AND OBTAINING A UNIFORM COMPLIANCE IDENTITY AT THE FEDERAL LEVEL IS A KEY STEP TOWARDS MAINSTREAMING THE INDUSTRY. IF OCC'S LICENCE CHANNELS ARE CLOSED, ENCRYPTION COMPANIES WILL BE FACED WITH HIGH COMPLIANCE COSTS AND FRAGMENTED REGULATORY PATTERNS FOR STATE-BY-STATE APPLICATIONS。

CURRENTLY, BPI HAS NOT FORMALLY INITIATED PROCEEDINGS, BUT ACCORDING TO INFORMATION SOURCES, ITS LEGAL TEAM IS ALREADY PREPARING. CSBS ALSO RETAINED THE OPTIONS FOR LITIGATION. IF EITHER SIDE OR ONE OF THEM TAKES ACTION IN THE COMING MONTHS, IT WILL BE THE MOST SIGNIFICANT LEGAL CONFRONTATION IN US BANKING REGULATION SINCE 2020 WHEN CSBS SUED OCC TO BLOCK FINANCIAL TECHNOLOGY LICENCES。

The OCC response window, the amendments to the rules that will enter into force on April 1, and the follow-up to controversial applications such as World Liberty Financial will be the most interesting points to follow。