Major Banks Eye Lawsuit Against OCC Over Crypto Licenses

Traditional banks may sue the OCC over national trust bank licenses granted to crypto firms like Ripple and BitGo, citing unfair competition risks.

According to reports, banks are concerned that granting national trust bank licenses to crypto firms could create new risks for the financial system and place traditional banks at a competitive disadvantage.

Understanding Crypto Banking Licenses

The Office of the Comptroller of the Currency (OCC) has begun issuing national “trust bank” licenses, which allow crypto companies to perform specific banking services without becoming full-scale traditional banks.

These licenses enable companies to offer services such as:

• Custody of digital assets
• Processing crypto transactions
• Infrastructure for institutional clients

However, the banking industry argues that this model may allow crypto companies to bypass some of the strict regulations that apply to traditional financial institutions.

Which Crypto Companies Are Receiving Licenses?

Among the companies that have received approval for such licenses are:

• BitGo
• Ripple
• Paxos
• Fidelity

At the same time, conditional licenses have been granted to other major industry players, including:

• Crypto.com
• Bridge
• Stripe

This trend demonstrates that regulators are gradually allowing crypto companies to move deeper into the traditional financial system.

Why Banks Are Opposing the Move

Major banks claim that these licenses could create regulatory arbitrage, where crypto firms gain access to banking functions without being subject to the same capital, liquidity, and risk management requirements.

They also warn that the rapid entry of crypto firms into the banking sector could create systemic risks if regulation is not sufficiently stringent.

A New Phase in the Conflict Between Banks and Crypto

A potential lawsuit would represent one of the largest legal battles between traditional banks and the crypto industry in the United States.

While crypto companies push for broader access to financial infrastructure, traditional banks fear that new rules could shift the balance of power within the financial sector.

If the lawsuit is filed, it could serve as a key precedent for how crypto companies will be integrated into the American banking system in the coming years.