Several major banking associations in the U.S. have called on federal regulators to pause the review of national bank charter applications submitted by crypto firms such as Circle and Ripple.
Banking Industry Raises Concerns Over Crypto Applications
The request was made in a joint letter sent to the Office of the Comptroller of the Currency (OCC). The letter warns that approving these applications could significantly alter longstanding regulatory practices. According to the signatories, the business models of the crypto firms lack clarity and sufficient transparency for proper regulatory analysis or public review.
> The American Bankers Association (ABA) and several banking and credit union groups have sent a letter to the OCC, asking it to delay the approval of national bank license applications from crypto firms like Circle and Ripple. — Wu Blockchain (@WuBlockchain) July 21, 2025
Implications of a National Charter for Crypto Firms
If granted, a national bank charter would allow crypto companies to operate across the United States under a single federal license, avoiding the need for separate approvals in each state. While this could streamline operations, it has raised concerns in the traditional financial sector. Critics argue that such changes could create unequal standards, allowing crypto firms to operate with reduced regulatory burdens compared to traditional banks. This may weaken overall financial safeguards and introduce new risks into the banking system.
Crypto Industry’s Regulatory Strategy in Transition
The dispute reflects a broader trend where digital asset companies are increasingly seeking federal banking licenses to enhance credibility, expand services, and streamline compliance with evolving regulations. Firms such as Circle, Ripple, and Fidelity aim to position themselves as key players in regulated financial markets. Legal analyst Logan Payne noted that new legislation, such as the GENIUS Act, which introduced a specialized license for stablecoin issuers, may be unintentionally encouraging companies to seek more comprehensive banking charters for operational flexibility.
Alexander Grieve, head of government affairs at crypto investment firm Paradigm, commented on the rare unity among traditional financial institutions, remarking, "Banks and credit unions rarely agree on anything. But they seem to agree that they’re finally about to have some competition from crypto."
The OCC's decision on whether to grant federal charters to crypto firms like Ripple and Circle carries significant regulatory and competitive implications. As traditional financial institutions push back against what they perceive as a disruptive shift in oversight standards, the outcome will likely shape how digital asset companies engage with the U.S. banking system in the years to come.
