Wall Street’s largest banks are quietly preparing for a new front in their long-running battle with the crypto industry: the courtroom.
According to people familiar with the matter, the Bank Policy Institute (BPI) – a powerful trade group whose members include JPMorgan Chase, Goldman Sachs, Citigroup, and other major U.S. lenders – is considering suing the Office of the Comptroller of the Currency (OCC) over its recent approach to granting federal banking charters to crypto and fintech firms.
At the center of the dispute is the OCC’s decision to make it easier for digital asset companies and financial technology startups to obtain national trust bank charters. These charters effectively give a firm the legal right to operate as a bank-like institution across all 50 states, bypassing the costly and time-consuming process of acquiring licenses state by state.
The OCC, now led by Comptroller Jonathan Gould – a Trump-era appointee with prior experience in the crypto sector – is accused by the banks of stretching its authority. Under Gould, the agency has reportedly reinterpreted existing rules in a way that lowers the threshold for what qualifies as a “bank,” especially when it comes to firms focused on custody, stablecoins, and digital asset services rather than traditional lending and deposit-taking.
Among the companies that have either applied for or already secured conditional approval for these charters are well-known names in the crypto ecosystem: Circle, Ripple, Paxos, Crypto.com, and World Liberty Financial, a project with ties to former President Donald Trump. These approvals are still subject to final conditions and ongoing supervision, but they represent a significant step toward putting crypto-native firms inside the regulated banking perimeter.
Traditional banks argue that this new path to national charters effectively allows crypto and fintech companies to enjoy many of the benefits of being a bank – such as nationwide operations, increased credibility with customers, and easier access to payment rails – without bearing the full burden of banking regulation. That includes some of the strictest requirements around capital, liquidity, consumer protection, cybersecurity, and anti-money laundering controls.
In their view, the OCC’s reinterpretation creates an uneven playing field. Large banks are required to hold substantial capital buffers, undergo frequent and costly examinations, and comply with an extensive web of federal and state rules that govern every aspect of their business. If crypto firms can access similar privileges under a lighter framework, banks say, the result is regulatory arbitrage: business migrates to the least regulated corner of the system, while the systemic risks remain.
The banks’ concerns are not purely theoretical. Crypto markets have already lived through a series of high-profile failures and scandals, from the collapse of major exchanges and lenders to questions around the backing of certain stablecoins. Wall Street lenders warn that if firms with looser oversight are allowed to operate as quasi-banks at national scale, future crises could more directly spill over into the traditional financial system.
For the OCC and its supporters, however, the issue looks very different. They argue that bringing crypto and fintech companies into a formal regulatory framework is better than leaving them in a gray zone. National charters, they contend, can impose clear rules, subject firms to federal supervision, and provide a more consistent standard of oversight than the current patchwork of state-level regimes and offshore jurisdictions.
Backers of the OCC’s approach also say that innovation in financial services has outpaced existing statutes. Many modern “banks” do not resemble the deposit-and-loan institutions on which earlier laws were built. Instead, they specialize in custody, payments, tokenization, stablecoins, or blockchain-based settlement. From this perspective, updating the charter process is not deregulation, but an attempt to align oversight with the realities of a digitized financial system.
Still, the political optics are delicate. Granting federal charters to crypto firms – particularly one associated with Trump-aligned figures – is likely to inflame partisan tensions in Washington. Critics are already framing Gould’s moves as ideologically driven, arguing that the OCC is catering to digital asset interests at the expense of regulatory prudence.
If BPI and its member banks do move ahead with litigation, it would raise fundamental questions about the boundaries of the OCC’s authority. A lawsuit would likely challenge whether the agency has the legal right to redefine what activities qualify a firm for a national bank or trust charter, and whether entities that do not engage in core banking functions like taking deposits or making loans should be allowed to operate under the same federal umbrella.
Such a case could become a major test for how U.S. law treats digital asset intermediaries. A ruling against the OCC might force crypto firms back into state-level regimes or into special-purpose charters with more limited powers. A ruling in favor of the OCC could solidify a pathway for a new class of federally chartered digital asset banks, accelerating the convergence of crypto and traditional finance.
The stakes are high for stablecoin issuers in particular. Companies like Circle and Paxos have sought closer integration with the banking system, positioning their dollar-pegged tokens as infrastructure for payments, trading, and settlement. A national trust bank charter could offer them greater legitimacy and potentially smoother access to banking services, but only if the OCC’s strategy survives legal and political scrutiny.
For retail and institutional customers, the outcome matters as well. On one hand, having crypto service providers under the oversight of a federal banking regulator might improve consumer protections, transparency, and operational resilience. On the other hand, if banks’ warnings are accurate and oversight is materially weaker, customers could be left exposed to hidden risks behind a veneer of official approval.
Even within the banking industry, views are not entirely uniform. Some large institutions have quietly explored their own digital asset initiatives, including custody, tokenization, and blockchain-based payment networks. A more permissive charter regime for crypto could be seen as an opportunity for banks to expand their own offerings, compete directly with fintech upstarts, and modernize their infrastructure – provided the rules are consistent and not tilted toward new entrants.
This looming legal clash also reflects a deeper question about the future architecture of the U.S. financial system: Will digital asset firms be integrated into the existing bank-centric model, or will they continue to develop in parallel, pushing for bespoke regulatory categories? The OCC’s moves suggest one vision – a regulated, bank-like status for certain crypto players. Wall Street’s resistance points toward another – a more cautious, segmented approach where traditional banks remain the primary gatekeepers.
For now, the prospect of litigation is only at the discussion stage. BPI and its members are reportedly weighing their options, assessing both the legal merits and the political consequences of taking on a federal regulator in court. Any decision to proceed would likely involve extensive coordination, as well as careful messaging to avoid appearing strictly anti-innovation.
Regardless of whether a lawsuit is ultimately filed, the controversy underscores how unresolved the regulatory status of crypto and fintech remains in the United States. Until lawmakers update the statutory framework or courts clarify the outer limits of agency power, battles like this are likely to continue – with banks, regulators, and digital asset firms all trying to shape how far and how fast crypto is allowed to move into the mainstream of American finance.