The Independent Community Bankers of America is suing to overturn the OCC's trust bank rule, aiming to block the legal path that lets crypto firms get federal trust charters for stablecoin and custody work.
The fight over crypto-focused national trust banks has landed in federal court. The Independent Community Bankers of America (ICBA) has filed a lawsuit to overturn the Office of the Comptroller of the Currency's (OCC) national trust bank rule. If the ICBA wins, it could upend how digital asset custody and stablecoin firms get regulated in the U.S.
Regulatory showdown
The ICBA filed its complaint in Washington just weeks after the OCC approved new trust charters for Agora National Trust Bank, Catena Trust Bank, and Bastion Platforms. The lawsuit asks the court to throw out both the OCC's national trust bank rule and Interpretive Letter 1176. The ICBA says the OCC went beyond its legal authority by letting limited-purpose trust charters cover fintech and crypto businesses. According to the ICBA, the OCC has approved or conditionally approved 21 trust banks, with 13 tied to crypto operations.
The OCC has approved or conditionally approved 21 national trust banks, with 13 directly connected to crypto operations.
Banking groups have pushed back on these approvals one by one, but the OCC has kept moving forward. In the past year, crypto-linked trust charters have gone to BitGo, Fidelity Digital Assets, First National Digital Currency Bank, Paxos, and firms connected to Ripple. More recently, Bridge, National Digital Trust, Foris DAX (the parent of Crypto.com), Coinbase, and Laser Digital have received decisions. Some of these approvals are still conditional or preliminary.
Rule change and legal arguments
The OCC finished its updated national trust bank rule in February, with the changes taking effect April 1. The rule swaps out "fiduciary activities" for the broader phrase "the operations of a trust company and activities related thereto." The OCC says this keeps its chartering power intact, pointing to 12 U.S.C. 24(Seventh) as the legal basis for allowing nonfiduciary custody and related work. The agency also notes that trust banks have long handled nonfiduciary services like custody.
The ICBA argues the new rule stretches the trust charter too far. It says the OCC is letting non-depository, non-fiduciary crypto firms operate under lighter rules than insured banks. The lawsuit doesn't just target the rule-it also seeks court orders that could affect both current and future charters. The court's decision may depend on how it treats final and conditional approvals, and whether some activities have their own legal backing.
ICBA president Rebeca Romero Rainey argues that the OCC's rule enables crypto and fintech firms to operate national trust banks for substantial non-fiduciary activities without being subject to Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, or FDIC insurance.
Crypto business models at stake
These trust banks don't all follow the same playbook. Coinbase focuses on digital asset custody as a fiduciary, with extra services tied to those assets. Agora plans to issue dollar-backed stablecoins, hold reserves, and offer nonfiduciary custody and payments. Catena mixes custody, investment management, and trust services with conversion and execution. Bastion aims for white-label stablecoin issuance and custodial wallets. Foris DAX and Bridge have approvals for custody, stablecoin issuance, trade settlement, and staking services.
How much each firm is exposed to the lawsuit depends on its business model. Traditional fiduciary custody is less at risk. Nonfiduciary custody, stablecoin issuance, reserve management, payments, settlement, and conversion are more directly in the crosshairs. If the OCC wins, the national trust bank charter could become a stronger federal path for crypto custody and stablecoin work. If the rule is struck down or narrowed, firms may have to change their operations, switch to state trust companies, or team up with banks to keep running.
Pending applications and market impact
The OCC says it got 40 new charter applications in 18 months, with 23 involving digital assets. Its digital-asset licensing page lists pending applicants like zerohash, Dakota National Trust Bank, Payward (Kraken), Lorum National Trust Bank, EDX Trust, and PAYO Digital Bank. It's not clear if these applications will move forward under the same rules while the court case plays out.
Big banks and crypto firms are watching. JPMorgan expects $500 billion in crypto custody and stablecoin infrastructure by 2028. Coinbase's model is built around $1.2 trillion. Standard Chartered projects $2 trillion. Citi's 2030 scenarios range from $1.9 trillion to $4 trillion. For comparison, FDIC-insured banks held about $20.7 trillion in deposits in the second quarter. Even the low end of these crypto forecasts would take a big chunk of the traditional banking base.
For a recent look at how stablecoin rails are being built into institutional banking, see EgonCoin's breakdown of Coinbase and Citi's stablecoin payments partnership.
The San Francisco Fed estimates that stablecoin issuers' demand for U.S. Treasuries could double to $400 billion by 2030. This shows the wider financial impact of the OCC's trust bank rule. The court's decision will decide how much nonfiduciary crypto infrastructure can run under a national trust bank charter-a question the OCC itself says only the courts can settle.
The OCC's approach to digital asset trust charters has opened a federal path for crypto custody and stablecoin issuance. The ICBA's lawsuit now puts that path at risk. The outcome will decide if federally chartered trust banks stay an option for crypto firms or if the industry will have to rely on state-level setups and more fragmented arrangements. Both traditional banks and digital asset companies have a lot riding on this. The court's ruling will set the direction for how U.S. regulators handle new financial technology under old banking laws.
National trust bank charters are now a main battleground for crypto regulation in the U.S. These banks don't take deposits or make loans like full-service banks, but they can offer custody, settlement, and other digital asset services. The fight centers on the line between fiduciary and nonfiduciary activities. Fiduciary custody means holding assets for clients with a legal duty of care. Nonfiduciary custody and stablecoin issuance may not have the same obligations or oversight. This case will decide how far federal regulators can stretch banking laws for new crypto business models-and whether the OCC's approach will hold up in court.
