US bank lobby challenges crypto firms’ bids for bank licences

Key Points

1. US banking and credit union groups asked the OCC to postpone decisions on bank license applications from crypto firms such as Circle Internet Group and Ripple Labs.

2. The groups argue that granting these licenses would raise legal questions and represent a significant change in OCC policy.

3. They claim that allowing crypto firms to operate as national trust banks could set a precedent, posing a 'material risk' to the US banking system.

4. Caitlin Long, founder of Custodia Bank, and Alexander Grieve of Paradigm commented on the banking groups' reaction, questioning the implications for capital requirements and regulations.

5. The newly passed GENIUS Act is expected to encourage more crypto firms to seek bank charters, according to crypto-focused lawyer Logan Payne.