From Marginalization to the Center: How Five Cryptocurrency Institutions Will Enter the U.S. Federal Banking System

In December 2025, a breakthrough occurred that changes the status of cryptocurrencies within the American financial system. The Office of the Comptroller of the Currency (OCC) conditionally approved the conversion of five institutions — Ripple, Circle, Paxos, BitGo, and Fidelity Digital Assets — into federally licensed national trust banks. This is not just a routine paperwork change but a fundamental restructuring of the industry’s position relative to traditional finance.

From “debanking” to systemic recognition

Just a few years ago, the situation looked entirely different. During the banking crisis in 2023, cryptocurrency companies experienced the so-called “debanking” crisis — systematically cut off from dollar settlement channels by commercial banks. Circle then had $3.3 billion USDC frozen in the banking system when Silicon Valley Bank collapsed. It was a warning to the entire industry: without access to the traditional banking system, operations could be halted immediately.

Today, the situation is completely different. The political shift in 2025, especially the signing of the GENIUS Act by President Trump in July, created new regulatory frameworks for stablecoins and cryptocurrency institutions. Stablecoins ceased to be seen as a threat and began to be regarded as a tool to strengthen the international position of the dollar.

What does the “federal trust bank” license mean?

The first point to clarify: this is not a traditional commercial bank license. The five approved companies cannot accept FDIC-insured deposits or extend commercial loans. For traditional commercial banks, this means unfair competition; for stablecoin issuers, it’s an ideal solution.

The business model of Circle or Ripple is based on 100% reserve backing. USDC and RLUSD do not engage in credit expansion, so they do not generate systemic risk as known from traditional commercial banks. Introducing FDIC insurance would be unnecessary and would only increase regulatory burdens.

A key feature of this license is the fiduciary duty. Licensed institutions must legally segregate customer assets from their own funds. After the FTX scandal, where customer funds were embezzled, this change is highly significant for the credibility of the entire industry.

More importantly — the federal license means simplified compliance pathways. Until now, companies like Circle or Paxos had to obtain money transfer licenses (MTL) in each of the 50 states, facing different requirements. Now, supervision is directly transferred to the OCC, which provides a pathway for nationwide operations.

The real value: direct access to the Federal Reserve

What distinguishes this decision from previous industry privileges? The answer is simple: access to the federal payment system.

Until now, every flow of USDC or stablecoins issued by other companies had to go through commercial banks as intermediaries. This model, known as the “correspondent banking system,” posed three problems:

1. Uncertainty: When a correspondent bank withdrew, the fiat channel for the crypto company was immediately closed
2. Costs and delays: Each layer of intermediaries added fees and extended settlement times
3. Credit risk: Funds during T+1 or T+2 settlement were exposed to bank failure

After obtaining the status of a federal trust bank, Ripple, Circle, and other companies can apply for a “main account” at the Federal Reserve. If approved, they will be able to directly use Fedwire and other federal settlement networks, enabling instant, irrevocable dollar settlements — without the involvement of commercial banks.

Systemically, this means Circle, Ripple, and similar companies will reach the same “infrastructure level” as JPMorgan or Citibank for the first time.

Radical efficiency improvements

Direct connection to the Fedwire system eliminates multi-layered intermediaries. Industry estimates suggest that for large-scale stablecoin issuance, the direct model could reduce total settlement costs by 30%-50%.

For Circle, managing nearly $80 billion in USDC reserves, annual savings just on payment channel fees could reach hundreds of millions of dollars. This is not marginal optimization but a fundamental restructuring of the economic model.

At the same time, the legal characteristics of stablecoins are changing. Reserves will be held in a trust system under federal OCC supervision and legally segregated from the issuer’s assets. This increases credibility compared to offshore stablecoins.

Change in the interpretation of “trust banking”

OCC head Jonathan Gould explicitly stated that the new access “provides consumers with new products, services, and sources of credit.” This interpretation indicates that regulators are beginning to see stablecoin issuance and asset tokenization as legitimate banking activities.

For Paxos, which was previously a model of compliance under strict oversight by the New York State Department of Financial Services, the change is clear: it gains the right to participate in the federal payment network, which it previously lacked.

This expansion of the “trust banking” definition is the most significant aspect of the entire regulatory change.

Political context: Trump era and the GENIUS Act

This change did not come out of nowhere. During his campaign, Trump repeatedly publicly supported the cryptocurrency industry, promoting the United States as a “global hub of crypto innovation.”

The GENIUS Act, signed in July 2025, established at the federal level a clear legal status for stablecoins. For the first time, non-bank institutions meeting certain conditions were allowed to become “qualified issuers of payment stablecoins” under federal supervision.

Key requirements of the Act:

• Stablecoins must be 100% backed by dollars or short-term US Treasury bonds
• This excludes algorithmic stablecoins and risky configurations
• Stablecoin holders receive priority in claims in case of issuer bankruptcy

The White House explicitly stated that regulated dollar stablecoins help increase demand for Treasury bonds and strengthen the dollar’s international position in the digital era. This is a fundamental shift: stablecoins are no longer a “threat” but a “strategic tool.”

Pushback from traditional finance

For traditional banks, the OCC decision is definitely bad news. Bank Policy Institute (BPI), representing JPMorgan, Bank of America, and Citibank, immediately articulated three main concerns:

First: regulatory arbitrage. BPI claims that crypto companies obtain “trust” licenses in name only, and in reality conduct systemic payment activities larger than many mid-sized commercial banks. They cleverly avoid Fed consolidated supervision as bank holding companies, creating a regulatory gap.

Second: breach of business separation. BPI warns that allowing tech firms to own banks undermines the firewall protecting against the use of bank funds by industrial giants. Additionally, these firms could leverage their social media dominance without social obligations (CRA), which traditional banks are burdened with.

Third: systemic risk. Since new trust banks lack FDIC insurance, panic related to stablecoin depegging could lead to rapid liquidity loss, quickly spreading across the entire system.

The last obstacle: main account at the Fed

An important caveat: the OCC decision does not yet guarantee access to the federal payment system. The Federal Reserve has independent authority over granting main accounts (master account).

Earlier, Wyoming-based crypto bank Custodia Bank sued the Fed after being denied a main account, showing that obtaining a license does not guarantee access to Fedwire. There remains a huge gap between OCC licensing and actual access to the Federal Reserve.

This will be the next battleground. Traditional banks and their lobbies will pressure the Fed to set very high requirements for granting main accounts — e.g., that institutions demonstrate AML capabilities at JPMorgan’s level or that parent companies provide additional capital guarantees.

The future: a new financial architecture

The OCC decision opens a new chapter but does not end the conflict. State authorities remain uncertain — strong agencies like the New York State Department of Financial Services will defend their role. Moreover, many detailed regulations stemming from the GENIUS Act still need to be developed.

Market changes are also expected. Traditional banks may acquire crypto firms to supplement technological expertise, or crypto companies may deepen their involvement in traditional banking — both trajectories are possible.

One thing is certain: crypto-finance is no longer an external user of the banking system. It has entered from the outside, but balancing innovation, stability, and fair competition will remain a key challenge for US financial regulators in the coming years.