BitPay files with OCC to become national crypto-native trust bank

Another crypto player has taken steps to go mainstream, but a lot of work still remains ahead.

Photo: Cointelegraph

Bitcoin (BTC) payments giant BitPay aims to form a national trust bank, based on its recent filing with the United States Office of the Comptroller of the Currency.

“We confirm BitPay has filed an application with the United States Office of the Comptroller of the Currency (OCC) to establish BitPay National Trust Bank,” BitPay general counsel and chief compliance officer, Eden Doniger, told Cointelegraph. “A national trust bank is a limited purpose national bank that engages in trust activities.”

A representative for the OCC told Cointelegraph that the office received BitPay's application on Dec 7. With its limited operations, a national trust bank does not, for example, need to purchase FDIC insurance required of most banks. 

Under the leadership of former Coinbase executive Brian Brooks, the OCC approved digital asset custody by federally-chartered banks this past summer. Following the new rulemaking, digital asset exchange Kraken received approval to set up a crypto-native bank in September.

The crypto clarity from the OCC came after more than 10 years of generally murky waters, including a number of high-profile cases in which banks cut off crypto firms from services. Consequently, Brooks has been hailed as a blessing for the industry.

However, Brooks never received Senate confirmation for his position and only recently got a nomination from President Trump. Given the impending change of administration and little reason to believe that Biden as president would re-nominate Brooks, the crypto industry is waiting with bated breath to see if the Senate schedules his confirmation hearings in the coming weeks. The OCC usually sets a timeline of 120 days to respond to applications like BitPay''s, in which time the office could be operating under completely different leadership.

“The OCC is at the forefront of government regulation of the cryptocurrency industry,” Doniger said, adding, “Our operations as a national trust bank will be subject to strict safety and soundness requirements which will provide our customers with assurances that our services remain best in class and allow us to be subject to a uniform regulatory framework.”

Called BitPay National Trust Bank, the payments company aims for a home base in the state of Georgia, according to BitPay’s application, posted on Wednesday.

BitPay still has a long road ahead though. “This is the first step of many on our journey to launch a chartered institution,” Doniger noted.

Avanti, an institutionally-focused crypto-friendly bank headed up by CEO Caitlin Long, recently received its banking charter approval in the month following Kraken’s news.

Reprinted from Cointelegraph, the copyright all reserved by the original author.