Comprehensive Review and Industry Insights: Crypto.com’s Venture into National Trust Banking
In a noteworthy development in the cryptocurrency sector, Crypto.com has received provisional approval from the Office of the Comptroller of the Currency (OCC) to establish a national trust bank. This approval paves the way for the company to charter Foris Dax National Trust Bank, which will be known as Crypto.com National Trust Bank upon obtaining full approval.
Crypto.com’s Strategic Move Towards Regulated Custodianship
Kris Marszalek, the Co-Founder and CEO of Crypto.com, emphasized that this milestone highlights the company’s dedication to regulatory compliance and the protection of its customers. Marszalek believes that full authorization would transform Crypto.com into a comprehensive service provider, operating with what he terms as the pinnacle of federal oversight.
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The company is planning to offer custody services, asset staking across various blockchains and digital asset protocols, including its Cronos network, and trade settlement services within a regulated framework. This strategic initiative underscores Crypto.com’s commitment to aligning with regulatory requirements and enhancing customer trust.
Growing Trend Among Digital Asset Firms
Crypto.com is not isolated in its pursuit of national trust bank status. Over the past year, the OCC has granted national trust charter applications to several notable digital asset companies, such as Circle’s First National Digital Currency Bank, Ripple National Trust Bank, BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company. Additionally, Stripe’s stablecoin infrastructure provider Bridge has also received conditional approval for a national trust bank charter.
Should these charters be finalized, crypto firms would be empowered to directly manage and safeguard customer assets, potentially improving payment processes and expediting settlement times. However, the OCC’s recent approvals have sparked concerns among traditional banking entities.
American Bankers Association Calls for a Pause on Approvals
The American Bankers Association (ABA) has recently urged the OCC to temporarily halt further approvals for crypto and stablecoin companies until there is greater regulatory transparency, particularly concerning the GENIUS Act. The ABA advises against advancing applications without a clear understanding of the regulatory obligations, including those that could emerge under forthcoming GENIUS Act regulations.
The association raised concerns about the safety and soundness of uninsured national trust banks primarily focused on digital assets. Issues such as asset segregation, potential conflicts of interest, cybersecurity threats, operational resilience, and the procedures for handling institutional failures were highlighted.
Continued Interest in National Trust Bank Status
The digital asset sector is witnessing an increasing interest in national trust bank designations. In January, World Liberty Financial (WLFI) announced that one of its subsidiaries had submitted an application to form a national trust bank centered on stablecoin operations.
In market-related news, Crypto.com’s native token, CRO, was trading at $0.074 according to CoinGecko data, showing a 20% decline over the past month.
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