ICBA Targets Crypto Firms’ National Trust Charters
The Independent Community Bankers of America (ICBA), one of the largest banking advocacy organizations in the United States, is turning its attention to the national trust charters that cryptocurrency companies are pursuing as a route into the U.S. banking and payments system. The organization typically represents smaller financial institutions and has opposed efforts it believes could expose community banks to direct competition from crypto firms.
The ICBA also played a significant role in opposing the Digital Asset Market Clarity Act, which failed to advance in the U.S. Senate last month. Bankers objected in part to the bill’s stablecoin provisions, arguing that they did not adequately protect traditional banks against competition with deposit accounts, which are central to their business models.
ICBA Questions Regulatory Obligations
Rebeca Romero Rainey, president and CEO of the ICBA, said national trust charters were not intended to give cryptocurrency companies an alternative route into the banking system while allowing them to avoid requirements imposed on federally chartered banks.
“Congress did not create the national trust charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter,” ICBA President and CEO Rebeca Romero Rainey said in a statement, adding that the firms don’t get the same obligations on such things as capital, liquidity, supervision and the need for insurance from the Federal Deposit Insurance Corp.
The ICBA’s criticism focuses on differences in capital, liquidity, supervision and Federal Deposit Insurance Corp. insurance obligations. The group argues that crypto firms using trust charters could gain the credibility associated with a federal bank charter without facing the full range of obligations applied to traditional banking institutions.
OCC Continues Granting Crypto Trust Charters
The Office of the Comptroller of the Currency has been granting a steady stream of trust charters to cryptocurrency companies. However, those firms do not operate under the same business models or necessarily intend to provide the same services as conventional community banks.
In particular, crypto firms pursuing trust charters do not offer the same type of cash deposit accounts for which Federal Deposit Insurance Corp. insurance is designed and required. The distinction is central to the debate over whether national trust charters could allow crypto companies to enter parts of the U.S. banking and payments system without directly replicating the deposit-taking model used by community banks.
Asked for comment by CoinDesk, an OCC spokesperson said the agency “does not comment on litigation.”
Why This Matters
The dispute highlights the growing regulatory divide between traditional community banks and cryptocurrency companies seeking federally recognized financial charters. The ICBA’s position reflects concern that crypto firms could receive the credibility and market access associated with federal banking status while operating under different requirements, particularly regarding deposits, insurance, capital and liquidity. The OCC’s continued approval of trust charters ensures that the question will remain part of the broader debate over how cryptocurrency firms should be supervised within the U.S. financial system.
Frequently Asked Questions
What is the ICBA challenging?
The ICBA is targeting the national trust charters that crypto firms are pursuing as an entry point into the U.S. banking and payments system.
Why did the ICBA oppose the Digital Asset Market Clarity Act?
The organization objected in part to the bill’s stablecoin provisions, which bankers said did not sufficiently protect community banks from direct competition with deposit accounts.
How do crypto firms differ from community banks under these charters?
Crypto firms with trust charters do not operate under the same business model as typical community banks and do not offer the same kind of cash deposit accounts for which Federal Deposit Insurance Corp. insurance is designed and required.
