Three Charts Show Who Wants a Federal Bank Charter and Why

The Office of the Comptroller of the Currency (OCC) recently granted nine significant charter determinations, including six conditional approvals, one final approval, and two denials within the past 90 days. Four of the conditional approvals were granted to companies developing digital asset infrastructure, while FinTech firms Upstart and Itaú applied for insured, full-service national banks.

OCC Chairman Jonathan V. Gould emphasized the importance of allowing entities involved in legally permissible activities, even those involving digital assets and novel technologies, to obtain a federal bank charter and federal deposit insurance.

The pending applications show a shift in the 21st century financial sector's perspective on the scope of a bank charter. Digital asset-focused companies are pursuing national trust banks, which enable them to manage activities such as custody, stablecoin reserve management, settlement, and asset conversion directly under federal supervision. In contrast, full-service applicants aim for the traditional banking powers, including deposits, lending, cards, and direct control of a balance sheet.

Digital asset applicants are primarily focusing on activities related to financial products rather than consumer-facing services. Examples include Dakota National Trust Bank seeking digital asset custody, dollar stablecoin issuance, and customer-directed transactions. Agora National Trust Bank targets stablecoin issuance infrastructure, reserves, and related custody, while Bastion Platforms National Trust Company aims for state-to-national trust conversion for white-label stablecoin issuance and related infrastructure.

Payoneer's proposed PAYO Digital Bank supports its PAYO-USD stablecoin, reserve management, and collateral trustee services.

These strategic differences matter, as a company controlling only the customer-facing stablecoin product relies on other institutions for critical infrastructure. On the other hand, a company that manages reserves, custody, or settlement through a regulated institution can remove intermediaries and gain greater control over its product's operation. The OCC's pipeline indicates that full-service applicants are making a different bet compared to crypto charters, focusing on traditional banking powers.