Executive Summary 

• Crypto firms continue the pursuit of national bank and state trust charters to access payment rails, supervisory clarity, and institutional credibility; regulators remain cautious however, due to unresolved concerns around liquidity risk, operational resilience, and the fit of digital-asset activities within prudential frameworks. 

• State trust charters have emerged as the most achievable entry point, yet they raise questions about supervisory consistency, regulatory arbitrage, and when trust-charter activities become functionally equivalent to banking, and thus warrant federal oversight. 

• The prolonged back-and-forth between applicants and regulators reflects broader policy tensions—innovation versus safety and soundness—and will ultimately shape how, and whether, digital-asset business models can be responsibly integrated into the U.S. banking system. 

Introduction 

While market, regulatory, and public dynamics continue to shift, crypto firms are moving forward with efforts to integrate more formally into the U.S. banking system. Crypto firms have found that approval under state charters is likely to be the most achievable entry point. Important concerns remain, however, about supervisory consistency, regulatory arbitrage, and when trust-charter activities become functionally equivalent to banking—warranting federal oversight. 

As crypto firms engage in the charter application process, the back-and-forth with regulators show a broader tension between innovation and institutional safety and soundness. How this tension is resolved will resolve how—or whether—digital-asset business models can be integrated into the banking system. While none of these initiatives has yet redefined the financial regulatory landscape, the sector’s persistence underscores a deeper policy challenge: how to integrate novel financial technologies into a system designed around balance sheets, liquidity risk and traditional payments infrastructure. 

The Policy Problem 

Crypto firms’ interest in bank and trust charters is not merely symbolic. Full-service charters provide clearer supervisory expectations and access to payment rails, while trust charters offer a more attainable regulatory foothold for custody and settlement activities. Regulators remain wary. Digital-asset activities present operational, market, and liquidity risks that do not map cleanly onto existing prudential frameworks. This mismatch has prompted a series of slow-moving, heavily negotiated applications in which agencies request increasingly granular information on governance, risk modeling, and compliance functions. 

The resulting dynamic—industry insistence on clarity versus regulatory caution—has produced a prolonged and often opaque chartering process that has implications for market structure, consumer protection, and competitive neutrality. 

Regulatory Landscape and Supervisory Constraints 

To date, chartering activity has fallen into three primary categories: 

Applications for National Bank Charters
Some crypto firms have sought national trust or full-service charters as a means of accessing federal oversight and, ultimately, the Federal Reserve’s payments system. These applications tend to stall on questions of operational resilience, separation of custodial assets, and the capacity to manage liquidity under stress. Regulators are particularly sensitive to the prospect of maturity transformation occurring inside institutions whose core assets may exhibit extreme volatility. 

State Trust Charters as a Parallel Pathway
State-level trust charters—especially in jurisdictions with digital-asset-specific frameworks—offer a more attainable route. They allow firms to provide custody, clearing, and settlement without full banking authorities. Yet these charters raise questions about supervisory consistency and the potential for regulatory arbitrage. As these entities attempt to expand their services, federal agencies must assess whether their activities approach the functional boundary of banking. 

Special-purpose Charters and the Limits of Innovation Policy
The debate over special-purpose charters continues to reflect broader tensions around regulatory modernization. While industry advocates promote them as vehicles for innovation, federal agencies have taken a narrower view, emphasizing statutory limits and the risk of creating institutions that benefit from federal privileges without satisfying prudential obligations. 

The existence of these separate pathways to banking access should not imply that crypto firms have had any measure of success. While applications have skyrocketed, the number of successful applications in any category remains extremely low. Anchorage Digital became the first crypto entity to receive a national bank charter in 2021; it remains the only crypto firm to have done so. 

Industry Motivations: Access, Credibility, and Scale 

For crypto firms, the logic of pursuing charters remains compelling. Direct integration into the Federal Reserve’s infrastructure would reduce reliance on third-party banks and mitigate counterparty risk. A charter—federal or state—offers a more predictable supervisory environment than money-transmission licensure scattered across multiple states. Perhaps the key attractions, however, are credibility and scale–institutional clients increasingly demand bank-level governance, risk management, and operational controls; for stablecoin issuers in particular, a banking framework provides a pathway to expand issuance while satisfying evolving regulatory expectations. 

These incentives explain why firms continue refining and resubmitting applications even after encountering significant supervisory friction. 

Implications for Market Structure 

The continued push for charters signals the growing pressure to integrate crypto infrastructure into the existing financial system. Yet it also highlights the structural obstacles standing in the way of that integration. Divergent state and federal approaches create uncertainty for both firms and policymakers. Traditional banks argue that crypto firms seek access to banking privileges without assuming the full burden of prudential regulation. But the key concern for regulators remains systemic risk. Premature or inadequately supervised integration of digital-asset activities could introduce new vulnerabilities into critical financial-market infrastructure. 

Conclusion 

The dream is simple: Perform bank-like activities with limited bank-like supervision, regulation, or capital requirements. Crypto firms’ efforts to secure bank and trust charters represent a persistent, strategic attempt to bridge the divide between digital-asset innovation and traditional banking regulation. While regulators remain cautious, industry demand for clearer supervisory pathways is unlikely to diminish. The outcome of this prolonged engagement will shape not only the market for digital-asset services but also the broader evolution of the U.S. regulatory framework as it confronts technologies that challenge long-standing definitions of banking, trust services, and financial intermediation.