On July 2 Axios reported a rush of crypto-finance companies to register with the U.S. Office of Controller of the Currency (OCC) to become “trust banks"—i.e., to provide some of the services of one office within a bank, and call it a bank. Some of the issuers applying are Ripple, Circle, the “digital services” office of Fidelity Bank, Paypal, etc.
The reasons are multiple, as Axios lists them (note the third):
“Large issuers will need the imprimatur of the OCC to run a compliant dollar-backed stablecoin if Congress passes the GENIUS Act this year.
“A national charter would also smooth the path for digital asset firms to expand their business lines, setting them up to offer custody services, tokenized assets and payment infrastructures.” But,
“National trust banks aren’t traditional Main Street banks, and can’t accept customer deposits or make loans,” according to 12 U.S. Code [Banking] Article 92A. So, no credit.
The Independent Community Bankers of America, which is protesting such charters, revealed in a letter to the OCC, that the Biden Administration, “in its final days,” changed eligibility requirements to make this possible. And earlier, “Beginning last Summer, Former Acting Comptroller Brooks made clear his belief that payments companies that neither take deposits nor make loans, are eligible for a national bank charter.”
This is a rattle of the deflationary snake that has been hiding under the digital currency bundle since at least 2019!
