Analysis of the Impact of Crypto Companies' Bank Charter Applications on the Traditional Financial System and the Crypto Industry Landscape

Based on the collected information, I will prepare a systematic and comprehensive analysis report for you.

On January 7, 2026, World Liberty Financial (WLFI), a crypto company affiliated with US President Trump’s family, announced that its subsidiary WLTC Holdings LLC had submitted an application to the Office of the Comptroller of the Currency (OCC) to establish World Liberty Trust Company (WLTC), a national trust bank dedicated to providing stablecoin services. [1][2]

The company stated that if the charter is approved, WLTC will be able to provide three core services to institutional clients such as crypto exchanges: stablecoin issuance and redemption, fiat currency exchange channels, and custody and exchange services. Notably, since its launch in March 2025, WLFI’s stablecoin USD1 has seen its circulation exceed $3.3 billion in its first year, growing faster than any other stablecoin in history. [3]

On December 12, 2025, the OCC conditionally approved national trust bank charter applications from five digital asset companies, including:

• Circle
  (First National Digital Currency Bank)
• Ripple
  (Ripple National Trust Bank)
• BitGo
  (BitGo Bank & Trust National Association)
• Fidelity Digital Assets
• Paxos Trust Company

This marks the first time the OCC has approved bank charter applications from crypto-related companies on a large scale, signifying a major shift in the US regulatory authorities’ attitude toward crypto financial services. [4][5]

According to regulatory data, the OCC received a total of 14 new national bank charter applications in 2025, nearly equal to the total number received in the previous four years. Most of these applications came from blockchain and crypto asset companies. [6]

Crypto companies obtaining bank charters are fundamentally changing the competitive landscape of traditional banking:

Analysts point out that the ability of banks to execute crypto asset transactions as “riskless principals” gives them a structural advantage. “They can earn fees and provide crypto exposure without holding inventory or taking on market risk.” [7]

After obtaining qualifications for crypto brokerage services, traditional banks will pose direct competitive threats to retail-focused exchanges. Ilies Larbi, founder of Quinex Exchange, said: “Allowing regulated banks to facilitate crypto execution brings more trust to consumers and eliminates frictions that hinder mainstream adoption. However, this also means banks may become the primary distribution channel for basic crypto exposure, which will pressure retail exchanges whose core revenues come from spot trading and custody.” [7]

1. Short-term (1-2 years)
   : Banks will focus on high-liquidity assets (Bitcoin, Ethereum, regulated stablecoins) and adopt a conservative, incremental strategy
2. Medium-term (3-5 years)
   : Retail order flow will shift significantly to bank channels, compressing the market share of independent platforms
3. Long-term (5+ years)
   : Industry consolidation will accelerate, forming a “Banks + Native Crypto Companies” collaborative ecosystem

In the face of shocks from crypto companies, traditional financial institutions are adopting diversified response strategies:

A large-scale M&A wave swept the crypto industry in 2025:

• Coinbase acquired derivatives exchange Deribit for $2.9 billion
• Kraken acquired futures trading platform NinjaTrader for $1.5 billion

These acquisitions indicate that companies prefer to acquire rather than build in-house to gain crypto capabilities. [8]

• JPMorgan Chase
  : Provides blockchain settlement infrastructure through the Kynexis platform and operates JPM Coin
• Goldman Sachs
  : Restarted its crypto trading desk to offer Bitcoin and Ethereum derivatives
• BNY Mellon
  : Launched digital asset custody services integrated into its existing custody and settlement system

Traditional banks have expressed strong concerns about crypto companies obtaining bank charters:

1. Regulatory Arbitrage Risk
   : Traditional banks argue that crypto companies are seeking federal legitimacy without assuming all regulatory obligations of national banks
2. Unfair Competition
   : The Bank Policy Institute (BPI) believes that companies providing “traditional banking activities” should seek full-service bank charters rather than limited-purpose trust charters
3. Systemic Risk Accumulation
   : Improper management of stablecoins and digital asset custody could trigger systemic risks

Crypto companies obtaining bank charters mark an important milestone in the industry’s shift from a “gray area” to full compliance:

Traditional crypto companies mainly operate at the protocol layer, and after obtaining bank charters, they will transform into regulated financial intermediaries that can directly provide:

• Stablecoin issuance and custody
• Fiat currency exchange channels
• Payment and settlement services
• Real-World Asset (RWA) tokenization products

Zach Witkoff, co-founder of World Liberty, clearly stated: “The national trust charter will allow us to integrate issuance, custody, and exchange under a highly regulated entity to provide end-to-end services.” [1]

The crypto industry is evolving from “exchange-dominated” to a “multi-tiered financial system”:

                    ┌─────────────────────────────────────┐
                    │  Traditional Banking (Chartered/Pending) │
                    │ JPMorgan Chase, Goldman Sachs, WLFI, Circle, BitGo │
                    └──────────────────┬──────────────────┘
                                       │
              ┌────────────────────────┼────────────────────────┐
              │                        │                        │
              ▼                        ▼                        ▼
    ┌─────────────────┐    ┌─────────────────┐    ┌─────────────────┐
    │ Full-Service Banks │    │ Limited-Purpose Trust Banks │    │ Independent Crypto Service Providers │
    │  (Full-service) │    │  (Limited Trust) │    │  (Non-bank)     │
    └─────────────────┘    └─────────────────┘    └─────────────────┘

As bank channels become mainstream distribution channels, independent crypto platforms are facing pressure. Market analysts predict:

1. Exchanges with sufficient capital and robust compliance will adapt to changes by strengthening infrastructure
2. A large number of small and medium-sized platforms will be acquired or exit the market
3. The industry will concentrate toward leading players, forming an oligopolistic competitive landscape

Traditional banks argue that crypto companies are testing the boundaries of financial regulation by applying for trust charters with clearly defined scopes. These “limited-purpose bank charters” allow them to engage in specific banking activities while avoiding the capital and operational requirements of full banking regulation.

The US regulatory framework still faces fragmentation issues:

• The GENIUS Act has been signed into law, regulating stablecoin issuance
• The CLARITY Act is still pending in Congress, failing to clarify the jurisdictional division between the SEC and CFTC
• Regulatory standards vary across states, making federal charter applications a hot spot

The close affiliation between World Liberty and the Trump family has triggered additional scrutiny:

• Trump is listed as an “Honorary Co-Founder”
• His three sons are all co-founders
• The regulatory approval process may face ethical reviews and political pressure

This may result in stricter scrutiny of both the OCC and World Liberty compared to ordinary applications. [2]

Under the requirements of the GENIUS Act, stablecoins must be backed by 1:1 Treasury reserves. If USD1 circulates on a large scale, the quality and liquidity of its reserve management will directly affect financial stability.

The global nature of crypto companies and the territorial regulatory principle of bank charters have inherent tensions, requiring cross-border regulatory coordination mechanisms.

As banks and a small number of leading players dominate crypto financial services, the following may occur:

• Diminished innovation momentum
• Concentration of pricing power
• Accumulation of systemically important risks

1. More Charters Approved
   : It is expected that more crypto companies will receive conditional approval from the OCC
2. Cautious Expansion by Banks
   : Traditional banks will focus on high-liquidity assets and adopt incremental strategies
3. Accelerated Industry Consolidation
   : M&A activities will continue, and small and medium-sized service providers will accelerate their exit or acquisition

1. Dual-Track Pattern Formation
   : Traditional banks and crypto-native banks will coexist and compete
2. Accelerated Product Innovation
   : Asset tokenization and stablecoin payments will become mainstream
3. Regulatory Convergence
   : International regulatory frameworks will gradually coordinate

1. Blurring Boundaries
   : The boundaries between traditional finance and crypto finance will be completely blurred
2. New Financial Infrastructure
   : Blockchain will become the mainstream financial settlement infrastructure
3. Maturity of RegTech
   : Compliance automation and real-time monitoring will become industry standards

Crypto companies’ applications for bank charters represent an important turning point in the evolution of the financial system. For traditional banking, this means the entry of new competitors and the restructuring of business models; for the crypto industry, this marks a key step from the fringe to the mainstream.

1. Reshaped Competitive Landscape
   : The competition between traditional banks and crypto companies will shift from a “substitution relationship” to a “co-opetition relationship”. Banks have advantages in retail channels and regulatory credibility, while native crypto companies maintain advantages in technology and innovation speed.
2. Accelerated Industry Consolidation
   : As bank channels become mainstream, independent platforms face pressure, and the industry will concentrate toward leading players, forming a multi-tiered financial service system.
3. Mature Regulatory Framework
   : The OCC’s large-scale charter approval marks a shift in the US regulatory framework from “law enforcement-driven” to “rule-guided”, providing a clearer compliance path for the industry.
4. Risks and Opportunities Coexist
   : Compliance brings greater capital inflows and mainstream adoption, while also bringing new challenges such as regulatory arbitrage, conflicts of interest, and systemic risks.

This transformation will profoundly reshape the future landscape of the global financial system, and its impacts will gradually emerge over the next decade.

[1] Coinspeaker - “Trump’s World Liberty Financial Applies for National Banking Charter in Push for USD1 Stablecoin” (https://www.coinspeaker.com/world-liberty-financial-national-banking-charter-usd1/)

[2] CoinDesk - “Trump-linked World Liberty Financial applies for federal bank charter” (https://www.coindesk.com/policy/2026/01/07/trump-linked-world-liberty-financial-applies-for-federal-bank-charter)

[3] FX168 - “When Crypto Expansion Meets Midterm Elections: Can Trump’s Money-Making Plan Succeed?” (https://www.fx168news.com/article/983309)

[4] Axios - “OCC conditionally approves 5 crypto firms for national trust bank charters” (https://www.axios.com/2025/12/12/banks-crypto-occ-charters)

[5] Kroll - “Crypto Comes of Age in 2025: Epic Strides in U.S. …” (https://www.kroll.com/en/publications/financial-compliance-regulation/crypto-comes-age-in-2025)

[6] Freshfields - “2025 Bank Regulatory Roundup and What to Look for in 2026” (https://blog.freshfields.us/post/102lymd/2025-bank-regulatory-roundup-and-what-to-look-for-in-2026)

[7] CoinDesk Chinese - “JPMorgan Explores Crypto Trading, Signaling Banks May Dominate Retail …” (https://www.coindesk.com/zh/policy/2025/12/22/crypto-exchanges-brace-for-pressure-as-banks-like-jpmorgan-enter-spot-trading)

[8] SVB - “Future of crypto: 5 crypto predictions for 2026” (https://www.svb.com/industry-insights/fintech/2026-crypto-outlook/)