Stablecoins and their issuance received a big boost Friday when five new national banks – two de novo charters and three conversions from state charters – were conditionally approved by the national bank regulator, all five of them planning to issue a digital currency.
The Office of the Comptroller of the Currency (OCC) asserted in a statement that new entrants into the federal banking sector are good for consumers, the banking industry and the economy. However, Comptroller Jonathon Gould did not mention that the five new national banks would all be issuing stablecoins.
New banks, Gould said, “provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system. The OCC will continue to provide a path for both traditional and innovative approaches to financial services to ensure the federal banking system keeps pace with the evolution of finance and supports a modern economy.”
The two new national bank charters issued were to:
First National Digital Bank, New York, N.Y.: The bank intends to issue the USDC, the OCC said, which is a U.S. dollar (USD) denominated stablecoin. The agency called USDC “one of the largest USD-denominated stablecoins worldwide.” USDC is now issued by Circle Internet Financial, LLC, under money transmitter licenses and similar authorizations It is a subsidiary of the bank’s holding company, Circle Group, also of New York.
Ripple National Trust Bank, San Francisco, Calif.: The bank (a subsidiary of Ripple Labs of San Francisco) will provide payments products and services that utilize blockchain technology, the OCC said. “Ripple is primarily known for the issuance of Ripple USD (RLUSD), a United States dollar denominated stablecoin. RLUSD is issued by a Ripple subsidiary, Standard Custody & Trust Company, LLC (SCTC), which is a New York limited purpose trust charter regulated by the New York State Department of Financial Services,” the agency stated.
Conversions from a state trust company to a national trust bank are:
BitGo Bank & Trust, N.A., Sioux Falls, S.D.: A subsidiary of BitGo Holdings, Inc., headquartered in Palo Alto, Calif., the OCC said the bank proposes to perform stablecoin issuance services (with the proposed issuance of a U.S. dollar-backed stablecoin ), as well as digital asset and fiat currency fiduciary custody services, among other things.
Fidelity Digital Assets, N.A., New York, N.Y.: Subsidiary of FMR LLC, Boston, Mass. The OCC said the resulting bank plans to provide cryptocurrency custody and trade execution services currently offered by Fidelity Digital Asset Services, (FDAS), and other related services. The bank also intends to issue its own stablecoin and provide staking services, both activities to be conducted on a non-fiduciary basis, the agency said.
Paxos Trust Company, N.A., New York, N.Y.: A wholly owned subsidiary of Paxos Holdings, LLC, a Delaware limited liability company that is, in turn, wholly owned by Kabompo Holdings, Ltd., a private company incorporated in the Cayman Islands. The bank is proposing to issue U.S. dollar-backed stablecoins and gold-backed digital assets. It also plans a crypto-asset exchange, brokerage, and trade facilitation services.
OCC Announces Conditional Approvals for Five National Trust Bank Charter Applications