Multiple US banking organizations are opposing the granting of banking licenses to cryptocurrency custody firms, stressing the importance of public consultation in altering industry policies. This opposition arises amidst growing acceptance of cryptocurrencies in the US, following a series of supportive measures signed by former President Donald Trump.
Crypto Custody Lacks Fiduciary Role, Say US Banking Groups
On July 17, five key banking associations, including the American Bankers Association (ABA), Consumer Bankers Association (CBA), National Bankers Association (NBA), America’s Credit Unions, and the Independent Community Bankers of America (ICBA), collectively appealed to the US Office of The Comptroller of The Currency (OCC) to rigorously evaluate recent applications for the National Bank Trust Charter by several crypto custody firms.
The letter specifically highlights applications from National Digital TR CO, Fidelity Digital Assets, NA, First National Digital Currency Bank, N.A., and Ripple National TR Bank, all of which are seeking OCC approval to function as national banks.
The banking groups argue that there is inadequate public information regarding these applications and their business objectives, which undermines their cases for obtaining a banking license. They note that the repetitive nature of the information available hinders the public’s ability to provide informed feedback.
As a result, they urge the OCC to disclose more details about the business strategies of these crypto custody firms and to extend the timeframe for public input.
Additionally, these associations assert that custody services do not fulfill the fiduciary responsibilities outlined by the National Bank Trust Charter under current OCC guidelines. They caution that issuing a banking license to such firms would represent a major shift in OCC policy, necessitating a period for public review.
The associations emphasize restricting the National Bank Trust Charter to institutions with fiduciary duties, warning that approving these applications could have significant policy, operational, and commercial repercussions for the US banking sector.
The statement noted:
If these Applicants succeed in becoming national trust banks that primarily offer non-fiduciary services, like traditional banking activities such as payments, other firms are likely to follow suit, posing substantial risks to the US banking and financial system, as the Associations anticipated in 2021.
Current State of the Crypto Market
As of now, the total cryptocurrency market cap stands at $3.82 trillion, having decreased by 1.03% over the last 24 hours. Bitcoin continues to lead with a market share of 61.1%. Nevertheless, a recent price drop, coupled with a surge in altcoins, suggests Bitcoin’s dominance might decline, potentially heralding an altseason.
