GW Law Faculty Publications & Other Works

Document Type

Article

Publication Date

2026

Status

Working

Abstract

The Office of the Comptroller of the Currency (“OCC”) has recently approved charters for nine limited-purpose national trust banks controlled by crypto firms (hereinafter “NTB charter approvals”). The OCC’s NTB charter approvals permit those national trust banks to engage in a wide range of nonfiduciary crypto-related activities. The OCC’s NTB charter approvals violate four federal statutes and must be rescinded. Under 12 U.S.C. §§ 27(a) and 92a, national trust banks are authorized to exercise only fiduciary powers and to act solely in federally-recognized fiduciary capacities. Sections 27(a) and 92a forbid the OCC from allowing national trust banks to engage in any nonfiduciary activities.

Three of the OCC’s NTB charter approvals involve national trust banks that converted from state-chartered trust companies.  The OCC claims that state-to-federal charter conversions allow national trust banks to engage in nonfiduciary crypto-related activities that were permissible for their state-chartered predecessors.  In fact, those charter conversion approvals violate 12 U.S.C. § 35.  Section 35 prohibits national trust banks, following state-to-federal charter conversions, from exercising any nonfiduciary powers or engaging in any nonfiduciary activities, regardless of whether their state-chartered predecessors could do so under state law.

Four of the OCC’s NTB charter approvals allow national trust banks to issue stablecoins while acting in nonfiduciary roles.  Those charter approvals violate 12 U.S.C. §§ 92a(d) and 378(a)(2).  The issuance of stablecoins in nonfiduciary roles by national trust banks constitutes an illegal acceptance of “deposits,” prohibited by §§ 92a(d) and 378(a)(2).

The OCC’s unlawful NTB charter approvals pose grave and unacceptable risks to U.S. financial and economic stability by allowing uninsured national trust banks to engage in highly speculative activities involving hazardous and extremely volatile crypto-assets. The OCC does not have any viable plan or external source of funding to deal with failures of crypto-focused national trust banks. As a result, threatened failures of large crypto-focused national trust banks are likely to precipitate bailouts, imposing significant losses on federal agencies and taxpayers.

The OCC must immediately rescind all nine of its NTB charter approvals.  The OCC may not approve a charter for any national trust bank unless that bank exercises only fiduciary powers, acts solely in federally-recognized fiduciary capacities, and complies fully with the requirements of §§ 27(a) & 92a.

GW Paper Series

2026-39

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