US regulator grants crypto firms initial approval to launch trust banks

Core Viewpoint - Major crypto companies, including Ripple and Circle, have received preliminary approval from a top banking regulator to establish national trust banks, which could enhance the integration of digital assets into the banking system [1][2]. Group 1: Regulatory Approval - The Office of the Comptroller of the Currency (OCC) conditionally approved national trust bank charters for Circle and Ripple, along with applications from BitGo, Paxos, and Fidelity to convert state trust bank charters to national charters [2]. - Final approval from the OCC is still required before these trust banks can commence operations [2]. Group 2: Operational Capabilities - If finalized, the national trust bank charters will enable these companies to manage and hold assets for customers and facilitate faster payment settlements [3]. - The charters do not permit these companies to accept cash deposits or issue loans [3]. Group 3: Industry Perspectives - Comptroller of the Currency Jonathan Gould stated that new entrants into the federal banking sector are beneficial for consumers, the banking industry, and the economy [4]. - The banking industry has expressed concerns, urging the OCC to reject some applications, citing potential systemic risks and a preference for lighter regulatory oversight by crypto companies [4].