US banks eye lawsuit over crypto charters

TLDR

Some of the biggest US banks are considering suing the main US bank regulator over its new crypto banking charters.

1. A powerful banking lobby is weighing an Administrative Procedure Act lawsuit against the OCC over easier national trust charters for crypto and fintech firms.
2. These charters already benefit firms like Ripple, BitGo, Paxos and Fidelity and could reshape who controls crypto custody and payments in the US.
3. The fight will decide whether crypto banks get a durable federal foothold or face court-imposed limits, with near term risk of delay and uncertainty rather than an outright ban.

Deep Dive

1. What Banks Are Challenging

Reporting says the Bank Policy Institute (BPI), which represents large lenders such as JPMorgan, Goldman Sachs and Citigroup, is weighing legal action against the Office of the Comptroller of the Currency (OCC) over its licensing policy for crypto, payments and fintech firms. The OCC, led by Jonathan Gould, has eased the path for these firms to obtain national trust bank charters, letting them operate in all 50 states with bank like powers but a lighter regulatory framework compared with full service national banks.

BPI and allied groups argue this reinterpretation of federal licensing rules could "blur the statutory boundary of what it means to be a bank, heighten systemic risk and undermine the credibility of the national banking charter itself" according to coverage cited by Yahoo Finance and others. Legal arguments are expected to focus on the Administrative Procedure Act, claiming the OCC made a major policy shift without proper notice and comment, and may have exceeded its authority under the National Bank Act.

2. Why Crypto Trust Charters Matter

Since late last year, the OCC has reportedly granted conditional national trust bank charter approvals to multiple crypto firms, including BitGo, Ripple, Paxos, Fidelity Digital Assets and Crypto.com, with others like Zerohash applying, as summarized by Cointelegraph. These entities typically focus on custody and asset safekeeping, not FDIC insured deposits, but a national charter lets them serve institutional and high value clients nationwide under a single federal license.

For crypto markets, that does two things: it creates regulated rails for custody, stablecoins and settlement, and it shifts business away from traditional banks that have been slower to embrace digital asset infrastructure. Banking trade groups worry that a "lighter" regime for these trust banks could let newcomers compete for payments and custody revenue without bearing the same capital, liquidity and resolution burdens.

3. What Could Happen Next

If BPI and allied groups file suit, likely claims include that the OCC's Interpretive Letter 1176 (which broadened eligibility for trust charters) is a substantive rule issued without proper process. A detailed legal analysis cited by Coincu notes courts could respond by temporarily staying new approvals, narrowing what activities these charters can perform, or even vacating the interpretive letter while allowing some existing approvals to stand.

In practice, that would inject uncertainty for firms with pending or conditional charters, potentially delaying launches or forcing tighter conditions, but it is unlikely to shut down existing crypto custody overnight. The broader context is the stalled CLARITY Act and other federal bills that aim to define crypto market structure; in the absence of clear legislation, banks and regulators are fighting over where the perimeter of "banking" stops and "crypto infrastructure" begins.

Conclusion

This brewing lawsuit is best seen as a power struggle over who owns the future plumbing of dollar based crypto services, not as a binary pro or anti crypto move. For crypto users and builders, the main implication is a higher risk of delays, extra conditions and fragmented rules in the US, while well capitalized firms with strong compliance may still secure federal charters if courts and Congress eventually validate some version of the OCC's approach.