Key Takeaways The Fed opened a 60-day comment period to codify the removal of “reputation risk” from supervision. The move follows the Fed’s June 2025 shift and parallel proposals from the FDIC and OCC. Crypto firms are watching closely, but regulators are positioning the proposal as a structural policy shift. The U.S. Federal Reserve has opened a 60-day public comment period on a proposal to formally remove “reputation risk” from its bank supervision framework. The proposal would codify steps th ...

Core Insights - The 14 de novo charter applications filed in 2025 represent a "return to the norm" for the Office of the Comptroller of the Currency (OCC) after years of regulatory dissuasion [1] - This year's applications nearly match the total from the previous four years combined, indicating healthy competition and innovation within the banking sector [2] Group 1: Charter Applications - The increase in national trust charter applications, particularly from cryptocurrency firms, has been met with pushback from bank industry trade groups [3] - The OCC supervises around 60 national trust banks that focus on fiduciary services without the ability to take deposits or make traditional loans [2] Group 2: Regulatory Perspective - Comptroller Jonathan Gould emphasized that prohibiting national trusts from engaging in nonfiduciary custody activities could undermine the federal banking system and disrupt over a trillion dollars in traditional activities [3] - National trust banks held nearly $2 trillion in nonfiduciary custodial or safekeeping assets under administration in the third quarter, representing about 25% of their total assets under administration [3] Group 3: Digital Assets and Innovation - Gould noted that custody and safekeeping services for digital assets have been conducted electronically for decades, and there is no justification for treating digital assets differently [4] - The push for new bank chartering is supported by multiple regulators, including Travis Hill from the Federal Deposit Insurance Corp., who highlighted the need to encourage new bank formation [5]

Core Viewpoint - A key banking regulator has authorized national banks to hold and spend cryptocurrency under certain conditions, marking a significant shift in regulatory stance towards crypto assets [1][5]. Group 1: Regulatory Changes - The Office of the Comptroller of the Currency (OCC) has confirmed that major banks can keep cryptocurrency on their balance sheets to pay network fees for permissible banking activities [1]. - National banks are now allowed to hold and utilize digital assets for testing crypto-related platforms, expanding their operational capabilities without incurring additional risks from third-party crypto acquisition [2]. - The OCC has shifted from a cautious approach under the Biden administration, which required prior approval for crypto activities, to a more permissive stance [3]. Group 2: Implications for Banking Sector - The OCC's new policy allows national banks to custody crypto assets for customers and engage in stablecoin-related activities, indicating a broader acceptance of crypto within traditional banking [4]. - The latest announcement enables national banks to hold crypto for multiple purposes, facilitating the integration of traditional banking functions with blockchain technology and increasing banks' involvement in the crypto sector [5].