bitgo

📅 November 12 | United States
In a turn of events that could transform the relationship between crypto and traditional banking, several of the ecosystem's most influential firms received conditional approvals that bring them closer to operating as federally regulated banks in the United States. Ripple, Circle, and BitGo, along with Fidelity Digital and Paxos, received provisional approval from the federal banking regulator—the OCC—to move toward a national trust bank charter that, if finalized, would allow these entities to hold client assets under federal supervision.

📖The Office of the Comptroller of the Currency (OCC) announced that it granted conditional approvals for a national trust bank charter to Ripple National Trust Bank, and that Circle's application for its entity, named First National Digital Currency Bank, also received conditional approval.
In the same announcement, the OCC indicated that it gave conditional approval to applications from BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company to convert their status from state trust company to national trust bank.
That firms like Circle and Ripple are moving forward in this direction would represent a huge boost for those seeking to merge the holding and trading of digital assets with traditional banking infrastructure.
However, the approvals are conditional: while they would pave the regulatory way, the entities would not be able to accept cash deposits or grant loans if they receive final approval. Yes, they could, however, custody their clients' assets under a federal umbrella, a point the executives enthusiastically emphasized in their public statements.
The Comptroller of the Currency, Jonathan V. Gould, noted that “New entrants into the federal banking sector are good for consumers, the banking industry, and the economy,” underscoring the regulator's positive approach.
The move comes in a political climate characterized by a more crypto-friendly administration, and several other major firms have already taken similar paths: Coinbase, Stripe's Bridge unit, and Crypto.com have filed applications for federal banking charters; until now, Anchorage Digital was the only crypto firm with a federal charter in the US. The practical relevance of these applications is particularly high for stablecoin issuers: an OCC charter would allow Circle, for example, to act as custodian of its own reserves and hold crypto assets for institutional clients, albeit without the powers of a traditional bank until it obtains final authorizations.

Topic Opinion:
The fact that major players are seeking and obtaining federal oversight responds to a clear demand for security, custody, and legitimacy; at the same time, it raises regulatory and supervisory challenges that must be addressed with absolute transparency. I believe that integrating crypto within regulated banking structures can be tremendously positive for institutional adoption, provided that the rules regarding reserves, auditing, and segregation of duties are clear.
💬 Do you think these federal bank charters will accelerate the institutional adoption of stablecoins?

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