US Banking Groups Urge OCC to Delay Crypto Bank Licenses

• ABA and credit unions request OCC to pause crypto bank approvals
• Concerns raised over regulatory policy and process gaps
• Circle and Ripple’s applications are at the center of the issue

The American Bankers Association (ABA), along with several credit union and banking organizations, has formally requested that the Office of the Comptroller of the Currency (OCC) delay its consideration of national bank charters for crypto firms such as Circle and Ripple. In a recent letter to the OCC, these groups expressed serious concerns over regulatory clarity and procedural consistency.

They argue that approving such applications without robust policy frameworks could create unfair advantages for crypto-native companies while putting traditional banks at a disadvantage. The letter emphasizes the need for a “comprehensive public process” before granting national bank status to firms operating primarily in digital assets.

Policy and Process Concerns Take Center Stage

The key argument from the ABA and its co-signers revolves around the lack of clear regulatory guidance on how crypto firms would operate under a national charter. They fear that without public input and transparent standards, these charters could sidestep important safeguards that apply to traditional financial institutions.

Specifically, the groups worry about gaps in areas such as capital requirements, consumer protections, anti-money laundering standards, and supervisory oversight. They also point to the risk of creating a parallel banking system with inconsistent rules.

The letter does not call for a ban on crypto banks but rather a pause until the OCC can establish clear rules, ideally in collaboration with other regulatory agencies and through open public comment periods.

Ripple and Circle Under Scrutiny

While the letter does not mention specific firms in detail, the applications from Circle, the issuer of the USDC stablecoin, and Ripple, the company behind XRP, are widely believed to be among those under OCC consideration. Both firms have made strides toward integrating more closely with the U.S. financial system, and obtaining a national bank charter would mark a significant step in that direction.

However, the resistance from banking groups signals that crypto’s entrance into federally regulated banking may not be smooth—and will likely require more dialogue and regulatory clarity before moving forward.

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