Federal regulator clears a Trump-linked crypto firm to run a national trust bank
The Office of the Comptroller of the Currency granted preliminary conditional approval to World Liberty Trust Company, which is set to take over issuance of the USD1 stablecoin.
WASHINGTON —
A national bank regulator has given preliminary conditional approval for a trust bank charter to World Liberty Trust Company, the banking arm of the crypto venture co-founded by the family of President Donald Trump.
The approval, disclosed in a letter from the Office of the Comptroller of the Currency, would let the company hold and administer reserves as a federally chartered trust institution rather than relying on a third-party partner. Pending final sign-off, it is expected to assume management of USD1, the dollar-pegged token issued under the World Liberty Financial banner and currently administered by an outside trust bank.
The decision is the first time a firm part-owned by a sitting president's family has received federal bank status, and several Democratic lawmakers had urged the agency to slow the application on conflict-of-interest grounds. Supervisors at the OCC have said charter decisions turn on capital, risk management and governance rather than ownership, and the conditional label means the company must satisfy operating requirements before it can open for business.
Trust charters have become the preferred route into the banking system for stablecoin issuers. They allow a company to custody reserve assets and settle redemptions without taking deposits or making loans, a narrower model that regulators have treated as easier to supervise. Several issuers and custodians have filed similar applications over the past two years.
For token holders, the practical question is what changes at redemption. Reserve management moving in-house concentrates operational risk inside one entity but shortens the chain of intermediaries between a holder and the dollars backing the token. Disclosure standards, attestation frequency and who audits the reserve will determine whether that is an improvement.
Lawmakers who opposed the application have signalled they will press the agency for the full conditions attached to the approval. Those conditions have not yet been published in full.