Ripple, Coinbase, and Circle Bank Charters at Risk as ABA Demands OCC Slowdown

The American Bankers Association (ABA), the largest banking lobby in the United States, has asked the OCC to immediately pause national bank charter reviews for crypto firms. Ripple, Coinbase, Circle, and several others are directly affected.

In a letter to the Office of the Comptroller of the Currency, the ABA said the process should be put on hold until Congress finishes writing the rules these companies will operate under.

“We urge the OCC to be patient, not measure its application decisioning progress against traditional timelines, and allow each charter applicant’s regulatory responsibilities to come fully into view before moving a charter application forward,” ABA said.

Why Is the ABA Pushing Back?

The GENIUS Act, the federal stablecoin law, requires five agencies to complete their own rulemaking before it’s fully implemented. That includes the OCC, Treasury, Federal Reserve, FDIC, and state regulators.

The ABA says that process is likely still years away, making it too early to approve charters based on compliance with a law that isn’t finished yet.

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The association also raised concerns about insolvency risk. If a crypto firm with an OCC charter goes under, the OCC would be responsible for handling the fallout.

“Entities engaged in activities substantially similar to those in which some recent OCC charter applicants presumably intend to engage have failed suddenly and for reasons that have resulted in meaningful losses – not only for the broader financial services industry but consumers, too.”

They pointed to FTX, which misused roughly $8 billion in client funds, and Celsius, which had a $1.2 billion deficit on its balance sheet, as reasons the current system may not be ready.

Which Crypto Firms Could Be Affected?

Ripple is at the top of the list. The OCC granted the XRP issuer conditional approval last month, which drew immediate opposition from the ABA. World Liberty Financial also filed to become a federally chartered national trust bank, a move that led Senator Warren to call for a halt.

Other firms waiting in the queue include Circle, BitGo, Paxos, Coinbase, and Nomura’s Laser Digital.

What Comes Next?

The ABA also pushed for a naming rule change. They want crypto firms that only handle trust or fiduciary activities to be barred from using “bank” in their name, arguing it could mislead consumers and damage public confidence in the banking system if one of these entities fails.

With the regulatory framework still incomplete and traditional banks pressing the OCC to slow down, the path to a national crypto bank charter just got a lot harder for these firms.

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