Big Banks Slam Brakes on Crypto Charters – Ripple, Coinbase Targeted!

Big banks push OCC to slow crypto charter approvals. Ripple, Circle, and Coinbase face new scrutiny. Safety standards are demanded before digital asset expansion.

Traditional banks want crypto stopped. The American Bankers Association just fired shots at digital asset firms. They’re demanding the Office of the Comptroller halt new bank charters.

Circle and Coinbase could be affected. Ripple’s banking ambitions might stall, too. The ABA submitted a comment letter today targeting OCC’s proposed chartering rules.

ABA Throws Wrench in Crypto Plans

The banking lobby isn’t playing nice. According to the ABA’s official statement, they want “robust, broadly applicable safety and soundness standards” before any crypto firm gets chartered.

Traditional banks represent $25.1 trillion in assets. They employ over 2,000,000 people nationwide. Now they’re using that weight against crypto.

The letter targets recent charter applicants specifically. Many focus on stablecoin operations. Others handle various digital asset activities. The ABA says Congress hasn’t defined rules yet.

That’s the problem, banks argue.

Regulatory frameworks don’t exist for stablecoins. The OCC shouldn’t approve charters without them. Federal and state regulators need clarity first.

Resolution Planning Gets Spotlight

Banks want insolvency protections strengthened. The ABA “strongly encourages OCC to ensure that its receivership capacities and related powers and practices are adequate.” New business lines create unfamiliar risks.

Crypto companies experiment constantly. Their operational risks aren’t traditional. The OCC needs proper tools for handling failures.

The letter mentions 12 CFR 5.20 amendments specifically. These proposed changes are “material,” according to the ABA. They deserve “continued deliberation” before implementation.

Other agencies have pending rulemakings, too. The OCC’s chartering decisions will influence those. Banks want coordination, not chaos.

Name accuracy matters to the ABA. They want rules preventing misleading titles. Trust companies shouldn’t use “bank” in names. Fiduciary-only entities can’t either.

Unless they’re bank subsidiaries, the association clarified.

This protects consumers from confusion. Entities must represent their services accurately. The ABA pushed for regulatory amendments prohibiting misrepresentation.

Transparency needs improvement throughout chartering. The association emphasized this repeatedly. Application processes should be clearer. Standards must be “well understood and upheld.”

The OCC faces pressure to slow down. Traditional timelines don’t apply here. The ABA urged patience explicitly. Let regulatory responsibilities “come fully into view” first.

Innovation moves fast, they acknowledged. But safety can’t be sacrificed. The $19.7 trillion in deposits they safeguard demands caution.

Charter applicants must wait longer. Their business models need proper frameworks. Federal oversight must catch up.

The banking industry extends $13.2 trillion in loans. They’re not risking systemic instability. Crypto firms face tougher scrutiny ahead.

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