On February 20, the OCC granted preliminary conditional approval for a charter application to establish a de novo national trust bank, which will be limited to trust company operations and related activities, including fiduciary services. The OCC’s decision explained that the approval was preliminary and conditional only, noting that final approval under 12 USC 27(a) would be contingent on meeting all preopening requirements. The OCC’s decision outlined certain specified conditions to which the preliminary conditional approval is subject, including, among other things, requiring the bank to maintain minimum capital and liquidity levels, limiting operations to activities specified in the approved business plan, obtaining prior OCC clearance for major changes in strategy or leadership, and adopting compliance, security and governance measures before opening. The agency emphasized that preliminary approval is not binding and may be modified, suspended, or rescinded if circumstances change before final authorization.

According to the decision, the proposed institution’s activities would include custody services for digital assets and U.S. dollars, trade settlement, staking, and riskless principal trading in a fiduciary capacity. The decision indicated that the proposed institution’s initial target market will include institutional investors, asset managers, corporate treasuries, sponsors of exchange-traded funds, proprietary traders, and New York- and Illinois-based retail clients.

The OCC said it received and reviewed four public comments regarding the application. According to the decision, the comments raised concerns about cryptocurrency-related activities, affiliate transactions, and the scope of the institution’s proposed activities and OCC oversight. In response to the comments, the OCC found the proposal consistent with applicable statutes and precedent and indicated that regular OCC supervision processes were sufficient to determine compliance with applicable laws. The agency declined a call to delay approval until pending rulemaking amending the governing framework for national bank charters was complete, noting that proposed revisions to the framework are intended only to clarify the existing framework and would not alter it.