America is creating a new class of crypto banks – but they aren’t really banks

Circle now has a federal bank charter. However, the charter provides no ordinary checking accounts, FDIC-insured savings accounts, or mortgages.

Circle National Trust is part of a new federal cohort built around custody, fiduciary administration, stablecoin reserves, and settlement.

Ripple, BitGo, Fidelity Digital Assets, Paxos, Bridge, Crypto.com, Coinbase, Morgan Stanley and World Liberty Financial have all received some form of Office of the Comptroller of the Currency approval since December. Most are still completing conditions required before opening.

Washington is giving crypto companies the regulatory shell of banking while separating it from the business model Americans usually associate with a bank. The result is a narrow institution that supervises assets and transactions without relying on the classic formula of collecting deposits and turning them into loans.

That legal form of a non-bank bank actually predates crypto. The OCC said it already supervised roughly 60 national trust banks when it approved five digital-asset applications in December. Its Morgan Stanley decision put assets under administration at uninsured national trust banks at $7.2 trillion as of March 31, including $1.7 trillion in custody and safekeeping accounts. Crypto has found a way to use that old form to capture the parts of finance best suited to tokens.