Is Wall Street worried? Major banks like JPMorgan Chase and Goldman Sachs are considering suing the OCC to protest the loosening of crypto banking licenses

The Banking Policy Institute, composed of forty major banks including JPMorgan Chase, Goldman Sachs, and Citibank, plans to sue the U.S. Office of the Comptroller of the Currency (OCC) in response to its decision to significantly relax the requirements for national trust bank charters, aiming to counter crypto companies obtaining such licenses.
(Background: The OCC has given the green light! Five crypto giants—Ripple, BitGo, Circle, and others—receive “conditional approval” for trust bank charters.)
(Additional context: A historic milestone! Kraken announced the establishment of the “U.S. Bank,” obtaining the world’s first SPDI license.)

Table of Contents

Toggle

• Why the banking group is taking action
• Controversy over national trust bank licenses
• State-level and community bank opposition
• Political and conflict of interest risks

U.S. financial regulation may face an unusual positive conflict. The Banking Policy Institute (BPI), representing about forty large institutions such as JPMorgan, Goldman Sachs, and Citibank, is considering filing a lawsuit targeting the OCC’s decision to broadly relax trust bank licensing standards. If successful, this lawsuit could bring the traditional banking sector and the pro-crypto policies of the Trump administration into court.

Why the banking group is taking action

According to The Guardian on the 9th, BPI’s legal team has completed initial preparations. Industry insiders believe the OCC’s rapid licensing process allows crypto companies to operate nationwide and attract customer assets without needing to meet traditional capital adequacy, deposit insurance, or liquidity standards.

Compared to the long-term compliance costs faced by banks, this creates a stark disparity, directly impacting pricing and risk management standards. Wall Street views this as “unfair competition.”

Controversy over national trust bank licenses

The trigger was the new OCC Director Jonathan Gould’s decision to lower application thresholds after taking office. Crypto firms like Circle and Ripple have already submitted applications, and payment tech companies are lining up.

Once licensed, these firms can bypass state-by-state application processes and quickly operate across states. Banks argue that this “regulatory arbitrage” blurs the safety boundaries originally set by federal banking laws and poses systemic risks.

Further reading: US OCC approves! Five crypto giants—Ripple, BitGo, Circle, and others—receive “conditional approval” for trust bank licenses.

State-level and community bank opposition

Criticism is not limited to large banks. The Conference of State Bank Supervisors (CSBS), representing state regulators nationwide, has formally written to the OCC, claiming that the policy undermines long-established consumer protection frameworks.

The Independent Community Bankers of America (ICBA) also issued warnings, fearing local banks will be pushed to high-risk markets. This joint opposition creates rare consensus between large and small institutions.

Political and conflict of interest risks

There is also political sensitivity behind the OCC’s policy. The Trump administration explicitly supported mainstreaming cryptocurrencies, and the Trump family’s World Liberty Financial applied for a similar license in January this year. External observers question whether policy changes are intertwined with family business interests, increasing congressional scrutiny.

If BPI’s lawsuit proceeds to litigation, courts will have to examine whether the OCC exceeded its authority and whether there are conflicts of interest involved.

Currently, the OCC has not publicly responded to BPI’s legal threat. Market analysts note that if litigation delays progress, crypto firms already approved or close to approval can continue operations, gaining an early advantage; conversely, if courts rule that the OCC overstepped, existing licenses could be revoked, leading to reassessment of industry mergers and funding strategies.

Further reading: Trump family WLFI applies for U.S. national trust bank license, aiming to issue USD 1 stablecoin independently.