Analysis: ICBA sues to overturn OCC trust-bank rule used by crypto firms

The Independent Community Bankers of America (ICBA) sued the Office of the Comptroller of the Currency (OCC) in federal court in Washington on Oct. 2. American Banker reported that the complaint seeks to vacate the OCC's national trust bank rule and Interpretive Letter 1176. American Banker reported that the complaint alleges the OCC exceeded its authority by expanding limited-purpose trust charters for fintech and crypto firms. ICBA also seeks declaratory and injunctive relief. ICBA says the OCC has approved or conditionally approved 21 trust banks, including 13 tied to crypto.

The OCC finalized the national trust bank rule in February, with an April 1 effective date. The rule replaced "fiduciary activities" with the broader statutory wording, "the operations of a trust company and activities related thereto." The OCC says the language leaves its chartering authority intact and that national trust banks have long performed some nonfiduciary work, including custody. The OCC cites 12 U.S.C. 24(Seventh) as authority for nonfiduciary custody and related activities. However, ICBA's complaint argues that the rule extends limited-purpose trust charters to non-depository, nonfiduciary crypto businesses under a lighter framework than insured banks face.

Banking groups objected to individual applications, but the OCC continued approving applicants. Five crypto-linked national trust applications, including BitGo, Fidelity Digital Assets, First National Digital Currency Bank, Paxos and Ripple-linked applicants, received decisions in December 2025. Bridge, National Digital Trust and Foris DAX, the parent of Crypto.com, followed in February. Coinbase followed in April, and Laser Digital followed in May. The OCC approved Agora National Trust Bank, Catena Trust Bank and Bastion Platforms on Sept. 18, two weeks before the lawsuit; several approvals are conditional or preliminary.

The OCC's February rule cited the Supreme Court's Loper Bright decision. The OCC said courts must exercise independent judgment when a party with standing disputes whether the National Bank Act authorizes a national trust bank charter. ICBA now requests that review of the authority underlying every charter that relies on the rule, rather than a decision on one applicant. The consequences for existing charters depend on the judge's order, including its treatment of final approvals, conditional approvals and activities with independent statutory support.

Legal exposure varies by business plan, with plain fiduciary custody furthest from the dispute and nonfiduciary custody, stablecoin issuance, reserves, payments, settlement, conversion and execution nearest. Coinbase's approved plan covers fiduciary digital asset custody and transactional services tied to custodied assets. The OCC defended Coinbase's plan as trust-company operations or related activities under fiduciary authority and 24(Seventh). Agora plans dollar-backed stablecoin issuance, reserve maintenance, nonfiduciary custody, and payment and settlement services. Catena combines custody, investment management and trust services with conversion, clearing and execution. Bastion offers white-label stablecoin issuance, custodial wallets, conversion and issuer services. Foris DAX's plan combines custody with trade settlement and staking. Bridge's initial approval covers custody, stablecoin issuance and orchestration, and reserve management.

The OCC said in August that the agency had received 40 de novo charter applications over about 18 months. Comptroller Jonathan Gould said 23 of those applications involved digital assets. The OCC's digital-asset licensing page lists pending applicants including zerohash, Dakota National Trust Bank, Payward (Kraken), Lorum National Trust Bank, EDX Trust and PAYO Digital Bank. Whether the OCC continues processing those applications on the same terms while the court considers the rule remains an open question.

A ruling supporting the OCC would strengthen the national trust bank route for crypto custody and stablecoin infrastructure, including bank-supervised Bitcoin custody and settlement-linked institutional services. JPMorgan projects $500 billion by 2028 for stablecoins. Coinbase's model centers on $1.2 trillion by the end of 2028. Standard Chartered expects $2 trillion by the end of 2028. Citi's 2030 scenarios range from $1.9 trillion in the base case to $4 trillion in the most optimistic case. FDIC-insured banks held about $20.7 trillion in deposits in the second quarter, making $500 billion to $2 trillion roughly 2.4% to 9.7% of that base.

A ruling vacating or narrowing the rule or letter would affect plans built around stablecoin issuance, reserves, nonfiduciary custody, conversion, payments and settlement most heavily. Affected firms might move activities into affiliates, state trust companies or partner-bank arrangements, while pending charters could face tougher review. Bitcoin custody could remain available, but national trust banks could have less flexibility for conversion, execution, settlement, staking-like services and collateral movement. The Federal Reserve Bank of San Francisco estimates that stablecoin issuers' Treasury demand could roughly double to about $400 billion by 2030.