Is the bank's cake being passive? U.S. banking industry plans to sue OCC to block crypto licenses

Article by ChandlerZ, Foresight News

According to The Guardian on March 9, an industry group representing 40 major U.S. banks—including JPMorgan Chase, Goldman Sachs, and Citibank—is seriously considering suing the Office of the Comptroller of the Currency (OCC) to prevent it from issuing bank trust licenses to cryptocurrency companies and fintech startups. Once filed, this lawsuit will escalate the conflict between traditional banking and the crypto industry over access to financial services into a legal battle.

83 Days, 11 Companies, a Race for Licenses

The trigger for this event dates back to December 2025. That month, the OCC conditionally approved trust bank licenses for five crypto-native companies, including Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets. This was the first time federal regulators issued such licenses to multiple crypto firms simultaneously.

Subsequently, a wave of applications followed. According to FinTech Weekly, within 83 days, 11 companies submitted trust bank license applications. The list includes crypto and fintech firms like Crypto.com, Bridge (Stripe’s stablecoin subsidiary), Zerohash, as well as traditional financial giants like Morgan Stanley. In February 2026, Crypto.com received conditional approval, just about four months after submitting its application.

Adding to the controversy, World Liberty Financial, a crypto enterprise linked to the Trump family, also applied for a similar license in January this year, planning to establish World Liberty Trust Company to directly issue its USD1 stablecoin. Senator Elizabeth Warren pressured the OCC to delay approval over concerns about foreign ownership and conflicts of interest, but OCC Director Jonathan Gould rejected the request.

Opposition Continues to Grow

BPI is not the only voice opposing this move. A multi-layered opposition coalition has formed around OCC’s policy.

The Conference of State Bank Supervisors (CSBS), representing regulators from all 50 states, has taken a firm stance. Chairman Brandon Milhorn publicly stated that OCC is assembling a “Frankenstein license,” transforming a narrow trust license into a backdoor for full banking operations. He also explicitly mentioned that “litigation is certainly a possibility,” and if OCC’s authority exceeds the bounds of the National Bank Act, states will consider administrative and legal actions.

The Independent Community Bankers of America (ICBA), representing 5,000 community banks, also voiced strong opposition, arguing that these new licenses would allow licensees to compete directly with traditional banks under a more relaxed regulatory framework, creating an unfair market environment.

The American Bankers Association (ABA) has directly called for OCC to suspend the licensing process.

Greg Baer, CEO of BPI, believes trust banks should not be held to the same regulatory and capital standards as federally insured banks. He argues that the licenses approved by OCC have far exceeded the statutory and historical purpose of trust banking.

Legal Dispute: An Interpretive Letter

The core legal issue centers on OCC’s Interpretive Letter 1176, issued in 2021. This letter redefined the scope of trust bank activities, effectively loosening the requirements for crypto and fintech companies to obtain licenses.

Notably, the author of this letter was Jonathan Gould, then OCC Chief Legal Counsel, now responsible for implementing this rule as OCC Director. On February 27, 2026, OCC further proposed a rule revision, changing the language from “trust activities” to “trust company operations and related activities,” scheduled to take effect on April 1. Critics argue this wording change further blurs the boundaries of trust bank activities.

Legal arguments from BPI and others focus on the fact that OCC’s reinterpretation and rule revisions effectively changed licensing rules without following the formal rulemaking procedures mandated by the Administrative Procedure Act (APA), including public consultation. If litigation begins, this procedural flaw will be a primary point of attack.

Gould’s side argues that trust companies have long provided both fiduciary and non-fiduciary custody services, and that stablecoin reserves are narrow, segregated, non-credit-creating activities. They also contend that law requires OCC Directors to approve all qualified applications, regardless of the technology used.

Who Can Enter the U.S. Financial System?

On the surface, this dispute concerns licensing standards. But at a deeper level, the core issue is who has the authority to access the U.S. financial system and under what standards.

Traditional banks worry about regulatory arbitrage: crypto and fintech firms can operate across all 50 states with a trust license, offering payment, custody, and stablecoin issuance services without bearing the same capital requirements, consumer protection obligations, or deposit insurance costs as full-service banks.

Crypto industry advocates argue that obtaining a unified federal compliance status is crucial for mainstream acceptance. If OCC’s licensing pathway is blocked, crypto firms will face high costs and fragmented regulation by having to apply state-by-state.

Currently, BPI has not officially filed a lawsuit, but sources say its legal team is preparing. CSBS also retains the option to sue. If either party takes action in the coming months, this will be the most significant legal confrontation in U.S. banking regulation since CSBS sued OCC in 2020 to block fintech licenses.

The upcoming response from OCC, the rule revision effective April 1, and the handling of controversial applications like World Liberty Financial will be key points to watch.