Singapore-based cryptocurrency exchange Crypto.com (CRO) announced on Friday its intention to apply for a national trust bank charter with the US Office of the Comptroller of the Currency (OCC). This strategic decision places Crypto.com alongside industry heavyweights such as Coinbase (COIN), Ripple Labs, stablecoin issuer Paxos, and Sony Bank, all of whom are also pursuing similar charter applications in the U.S.
According to the exchange’s official statement, the application aims to bolster Crypto.com’s custody technology while expanding its customer offerings, which currently include asset custody and staking services across diverse blockchains and digital asset protocols such as Cronos.
What A National Trust Bank Charter Means For Crypto.com
A National Trust Bank Charter would position Crypto.com as a leading destination for custody solutions, particularly for Digital Asset Treasuries (DATs), Exchange Traded Funds (ETFs), as well as catering to corporate and institutional investors. Kris Marszalek, Co-Founder and CEO of Crypto.com, commented on this significant move, expressing excitement about the opportunity to enhance customer services and trust.
Importantly, a national trust bank charter allows companies to act as fiduciaries, facilitating asset management and transaction settlements, yet it does not enable them to accept traditional bank deposits or issue loans. This specialized charter appeals particularly to firms looking to oversee stablecoin reserves and digital assets under the purview of a single federal regulator, thereby simplifying compliance compared to managing multiple state licenses.
A New Era For Crypto Banking
In a related development, Erebor, a firm backed by tech entrepreneur Peter Thiel, has obtained partial regulatory approval from the OCC to launch operations, aiming to fill the void created by the collapse of Silicon Valley Bank (SVB). A source familiar with Erebor’s ambitions shared that the bank intends to establish itself as a stable and reliable institution, committed to providing solid banking services without undue risk.
Headquartered in Columbus, Ohio, with an additional office in New York, Erebor plans to deliver digital-only banking services through a user-friendly smartphone application and website. Additionally, the bank is expected to incorporate stablecoins into its operations, following a recent reversal of regulations that had previously limited bank involvement in stablecoin transactions.
As the crypto landscape evolves under a pro-crypto administration, it remains unclear whether applications like that of Crypto.com will receive the same degree of regulatory support as Erebor. However, it is evident that the cryptocurrency sector is in urgent need of improved banking services following the high-profile collapses of Silvergate and Signature Bank.
This critical juncture in the crypto banking sector signals a transformative period, where exchanges and new banks alike seek to redefine their roles in the financial ecosystem, as the industry continues to grapple with stringent regulations and evolving market dynamics.
