Original Author: ChandlerZ, Foresight News
According to a report by The Guardian on March 9, the Bank Policy Institute (BPI), an industry organization representing 40 major U.S. banks including JPMorgan, Goldman Sachs, and Citigroup, is seriously considering suing the Office of the Comptroller of the Currency (OCC) to stop the latter from issuing U.S. bank trust licenses to cryptocurrency companies and fintech startups. Once the lawsuit is initiated, the conflict between traditional banking and the crypto industry over financial access rights will officially escalate into a legal confrontation.
83 Days, 11 Companies, A License Race
The trigger for the event can be traced back to December 2025. In that month, the OCC conditionally approved the trust bank licenses of five crypto-native companies in one go, including Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets. This was the first time that a federal regulatory agency issued such licenses in bulk to crypto companies.
Subsequently, a wave of applications quickly poured in. According to FinTech Weekly, a total of 11 companies submitted applications for trust bank licenses within 83 days, including crypto and fintech companies like Crypto.com, Bridge (a stablecoin subsidiary of Stripe), and Zerohash, along with traditional financial giants like Morgan Stanley. In February 2026, Crypto.com received conditional approval just about four months after submitting its application.
What further sparked controversy was that the cryptocurrency company World Liberty Financial, linked to the Trump family, also submitted a similar license application in January this year, planning to establish World Liberty Trust Company to directly issue its USD1 stablecoin. Senator Elizabeth Warren had pressured the OCC regarding foreign ownership and conflict of interest issues related to that application, calling for a halt to its approval, but was rejected by OCC Director Jonathan Gould.
The Opposition Is Expanding
The BPI is not the only voice of opposition. Currently, a multi-tiered opposition alliance has formed around the OCC's policy.
The Conference of State Bank Supervisors (CSBS), representing regulators from all 50 states, has taken a strong stance. Its chair, Brandon Milhorn, publicly stated that the OCC is piecing together a Franken-license, transforming a narrowly tailored license originally intended for fiduciary management into a backdoor for comprehensive banking operations. He also clearly mentioned that "litigation is certainly a possibility," and if the OCC’s charter expansion exceeds the boundaries set by the National Bank Act, states will consider taking administrative actions and legal measures.
The Independent Community Bankers of America (ICBA), representing 5,000 community banks, has also expressed strong opposition, believing that these new license holders will directly compete with traditional banks under a more relaxed regulatory framework, leading to an unfair market environment.
The American Bankers Association (ABA) has directly called for the OCC to suspend the approval process.
BPI CEO Greg Baer believes that trust banks do not need to meet the same regulatory and capital standards as federally insured full-service banks, and these trust licenses approved by the OCC have far exceeded the statutory and historical purposes of trust bank licenses.
The Legal Controversy Focus: An Explanatory Letter
The legal core of this conflict points to Interpretive Letter 1176 issued by the OCC in 2021. This letter redefined the scope of trust bank operations, effectively relaxing the entry barriers for crypto companies and fintech firms to obtain licenses.
It is noteworthy that the person who drafted this letter was Jonathan Gould, the then OCC Chief Legal Counsel, who is now responsible for enforcing this rule as the OCC Director. On February 27, 2026, the OCC further submitted a rule amendment that changed the trust activities listed in the licensing provisions to trust company operations and related activities, with the amendment set to take effect on April 1. Critics argue that this wording change will further blur the operational boundaries of trust banks.
The legal arguments made by organizations like BPI focus on the fact that the OCC has substantively changed the licensing rules through the explanatory letter and wording revision while circumventing the formal rulemaking procedures required by the Administrative Procedure Act (APA), including public consultation. If a lawsuit is initiated, this procedural flaw will become a primary point of attack for the plaintiffs.
Gould's side argues that trust companies have long provided both fiduciary and non-fiduciary custodial services, and stablecoin reserves belong to a narrow, isolated, non-credit-creating business, and the law requires that the OCC Director must approve all applicants who meet the statutory conditions, irrespective of the technology used.
Behind the License Dispute: Who Can Enter the U.S. Financial System?
On the surface, this controversy concerns the approval standards for a license, but at a deeper level, the core issue of all parties involved is who has the right to enter the U.S. financial system and under what standards.
The traditional banking industry is worried about regulatory arbitrage, as cryptocurrency companies and fintech firms can operate in all 50 states by acquiring a trust license, offering payment, custodial, and stablecoin issuance services without having to bear the same capital requirements, consumer protection obligations, and deposit insurance costs as full service banks.
The logic from the crypto industry is equally clear; obtaining a unified compliance identity at the federal level is a key step toward mainstreaming the industry. If the OCC's licensing pathway is closed, crypto companies will once again face the high compliance costs and fragmented regulatory landscape of applying state by state.
Currently, the BPI has not formally filed a lawsuit, but insiders reveal that its legal team is preparing. The CSBS also retains the option of litigation. If either side or one of them takes action in the coming months, it will become the most significant legal confrontation in U.S. banking regulation since the CSBS sued the OCC to block fintech licenses in 2020.
The OCC's response window, the rule amendments taking effect on April 1, and the follow-up handling of controversial applications like World Liberty Financial will be the most noteworthy points to watch in the near future.
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