The Crypto Industry "Turns the Tide": Five Main Organizations Officially Become Banks, Exit Brokerage Banks

In December 2025, OCC (Office of the Comptroller of the Currency) announced a decision that shook the crypto finance industry: Ripple, Circle, Paxos, BitGo, and Fidelity Digital Assets are approved to convert into national trust banks.

This number may seem ordinary, but behind it lies a revolution in payment infrastructure. These companies will soon have direct access to Fedwire – the US Federal Reserve’s payment network. What does that mean? It means they will no longer need to “ask permission” from traditional commercial banks.

Breaking Out of the “Gate” of Correspondent Banking

For years, the crypto industry has been “on the outside.” To transact in real USD, Circle had to go through commercial banks, Ripple as well. This model is called correspondent banking system, and it comes with three troublesome issues:

1. Risk of “cutting off” flows: During 2022-2023, when Silvergate Bank and Signature Bank collapsed, the crypto industry was broadly “de-banked.” Funds were stuck, operations halted. That’s the industry’s fear of being “stopped by traffic police.”

2. Sky-high costs: Each transfer passes through 3-4 banking layers, each charging fees. Payments are delayed by T+1 or T+2. Circle once had $3.3 billion stuck in the banking system after Silicon Valley Bank’s collapse – money that couldn’t be used or withdrawn.

3. Lack of certainty: When you send money into a stablecoin, the actual assets are under the control of a third-party bank. The credit risk isn’t on Circle or Ripple, but on JPMorgan.

Now, it’s different. When becoming a federal trust bank, Ripple can open a main account at the Fed, connect directly to Fedwire, and settle final USD payments in real-time without any intermediaries.

In other words: from “bank customer” they have become “part of the banking system.”

Cost Savings: Not Just Small Optimization

The cost advantage of direct Fed access is enormous. Industry estimates:

• Fedwire fees are 50-70% lower than commercial bank transfer fees
• Elimination of intermediary layers: no more processing fees, account maintenance fees, liquidity management fees at each layer
• Total costs can be reduced by 30-50% in high-frequency payment scenarios

Take Circle as an example: managing nearly $80 billion in USDC reserves, with large daily cash flows. Just the payment channel costs could save hundreds of millions of USD annually. This isn’t just small optimization but a complete restructuring of the business model.

Stablecoin “Transformation”: From Digital Certificate to Legal Asset

When Circle or Ripple operate as federal trust banks, USDC or RLUSD are no longer just “digital certificates issued by a company”, but become financial products under federal supervision by OCC.

Specifically:

• Reserves are placed under federally supervised trust systems
• Legal separation from the company’s assets is enforced
• Stablecoin holders are prioritized for payments if the issuer goes bankrupt

The conclusion is: with the combination of “100% full reserves + federal supervision + fiduciary responsibility,” trustworthiness surpasses most other stablecoins. That’s why institutional investors, who have long hesitated, now see the legal barriers removed.

The GENIUS Law: The “Context” of Everything

In July 2025, Trump signed the GENIUS Act, which for the first time established clear federal legal status for stablecoins. This was the “push” that prompted OCC to dare to move forward.

The law stipulates:

• Stablecoins must be 100% backed by US dollar cash or short-term US government bonds
• Eliminates space for algorithmic or high-risk stablecoins
• Stablecoin holders have priority rights if the issuer files for bankruptcy

This legal foundation enables OCC to approve these five organizations to transition into trust banks – a reasonable step, not reckless.

Traditional Banks: “Feeling Encroached”

Of course, not everyone welcomes this decision happily. Bank Policy Institute (BPI) representing JPMorgan, Bank of America, Citibank quickly launched a defense, raising three accusations:

1. “Loophole”: Tech companies use trust licenses to avoid consolidated supervision. Parent companies (Circle Internet Financial, Ripple Labs) are not supervised by the Fed; software errors or misinvestments could cause damages without accountability.

2. Breaking “firewalls”: Allowing tech companies to own banks means they can use bank capital to fund their commercial activities.

3. Unfair competition: Tech firms leverage data and user bases to dominate banks, but do not have to fulfill the same investment obligations to the community (CRA) as traditional banks.

The “Final Gate”: From Licensing to Opening Accounts at the Fed

The OCC has issued the license, but it’s not the end. The final hurdle is the Fed – the decision whether these five organizations will be granted main accounts.

Previously, Custodia Bank was rejected by the Fed, leading to prolonged litigation. BPI will surely exert pressure on the Fed, demanding very high standards for approval – for example, demonstrating anti-money laundering capabilities (MTL) comparable to JPMorgan, or requiring the parent company to provide additional capital guarantees.

This is the next battleground: if they cannot open accounts at the Fed, the banking license is just a “pretty paper.”

The Future: The Battle Has Only Just Begun

This approval decision is not the end, but the beginning. Many battles lie ahead:

• State authorities’ power: NYDFS and other state agencies have long been the “iron fist” managing crypto. As federal priority expands, legal disputes may erupt.

• Regulatory details: The GENIUS Act is in effect, but standards for capital, risk segregation, cybersecurity remain to be issued by regulators. The game of interests will unfold within these technical rules.

• M&A and industry restructuring: When crypto companies become banks, they can be partners or acquisition targets. The financial landscape could undergo a complete overhaul.

Conclusion: These five organizations have escaped the “gate” of correspondent banking and entered the infrastructure system. But how to balance innovation, stability, and competition will remain a key question for US finance in the years to come.