Major U.S. banks may sue the regulator over licenses for crypto companies

Key points:

• Major U.S. banks are considering filing a lawsuit against the OCC regulator.
• The reason is the issuance of banking licenses to crypto and fintech companies.
• Banks argue that the new rules create unequal conditions and systemic risks.

The largest U.S. banks are discussing the possibility of filing a lawsuit against the Office of the Comptroller of the Currency (OCC) — the federal banking regulator. The dispute centers on new rules that make it easier for crypto and fintech companies to obtain a national banking license.

The issue concerns so-called national trust bank charters, which allow companies to operate across the entire United States. Banking lobbyists argue that such approvals give crypto companies banking capabilities without full banking regulation.

The potential lawsuit is being considered by the Bank Policy Institute, a banking association representing about 40 of the largest U.S. banks, including JPMorgan, Goldman Sachs, and Citigroup.

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Why banks oppose the move

According to sources, the OCC has effectively simplified the process for crypto and fintech companies to obtain national licenses. This allows such companies to offer financial services nationwide without the same requirements and supervision applied to traditional banks.

The Bank Policy Institute warns that this approach could blur the line between banks and other financial companies and increase systemic risks.

Several crypto companies have already applied for or received conditional approval for such licenses, including Circle, Ripple, Paxos, Crypto.com, and the World Liberty Financial project linked to Donald Trump.

Banking associations are also urging regulators to slow down the issuance of licenses until a comprehensive regulatory framework for digital assets and stablecoins is completed.

At the same time, supporters of the reform argue that banks’ resistance is primarily driven by competition. According to some legal experts, traditional financial institutions fear the emergence of a more flexible licensing system for new market participants.

Earlier, the U.S. Treasury proposed that Congress consider legislation allowing crypto platforms to temporarily freeze suspicious digital assets. The proposal refers to a so-called hold law mechanism that would give exchanges the authority to hold funds during investigations.