World Liberty Financial Apply for OCC Trust Bank Charter

World Liberty Financial, a cryptocurrency venture linked to President Donald Trump’s family, has submitted an application to the Office of the Comptroller of the Currency to establish a national trust bank.

The proposal aims to place USD1 stablecoins directly under federal supervision, out of a regulatory category that has allowed only one cryptocurrency-based company to date.

If approved, the proposed entity, called World Liberty Trust Company, “could underwrite the issuance and redemption of USD1, provide conversion services for USD1 from other major stablecoins, provide custody services for fiat and major stablecoins, and perform reserve management for assets backing outstanding USD1,” said Mack McCain, general counsel at World Liberty Financial and proposed trust officer for WLTC, who will oversee custodial operations. decryption.

Stablecoins are cryptocurrencies designed to enable price-stable digital payments and settlements by tracking the value of a reference asset (most commonly the U.S. dollar, but sometimes other currencies or commodities).

“We want to do all of this in a highly regulated and transparent manner,” McCain added.

Nonetheless, it is rare for a National Trust Bank Charter to be granted, especially for cryptocurrency companies.

So far, Anchorage Digital remains the only digital asset company to secure digital assets, according to the regulator, which oversees about 60 national trust banks. A federal charter was given. Conditional approval In 2021.

This sets a high bar for other institutions seeking to apply and indicates that the OCC has so far treated cryptocurrency-based trust banks as an exception to the status quo.

Unlike recent efforts by fintech companies like PayPal to establish state-level deposit-taking banks, World Liberty’s application targets a trust charter that would allow for custody and settlement functions without loans or secured deposits.

upgrades needed

World Liberty’s charter outlook appears to be a “structural upgrade” that would advance stablecoins “from a trading tool to a payment tool,” said Chris Loeffler, CEO of Nasdaq-listed digital asset management platform Calibre. decryption.

“As more people and institutions transact using digital currencies, these transactions require the ability to settle between parties without the risk of the currency fluctuating in value, and this Charter provides a federally regulated structure to make this possible,” he said.

Stablecoin issuers like World Liberty use structures designed for state-licensed institutions, but “there are regulatory frictions between states and partnerships with established financial institutions,” he explained. These conditions “reduce issuer profitability and create counterparty risk,” he added.

“None of these are very attractive to stablecoin issuers who want more TradFi to make the infrastructure they need to do business in the DeFi world ubiquitous,” Loeffler said.

He also said the move could be “a signal of where stablecoin legislation and regulation is going.” “It will be a niche option as far as the federal government measures how many charters it can get.”

As a decentralized finance project, world free finance It operates on a public blockchain network and has developed token-based financial products centered around the USD1 stablecoin. Released Together in March last year WLFIGovernance token.

Despite efforts, the venture scrutiny Describes ownership structure and financial disclosures.

According to documents related to the token sale, Trump-affiliated companies were entitled to a significant portion of the proceeds and later reduced their ownership stake as the Senate. inquiry We investigated Trump’s cryptocurrency ties.

Lawmakers also questioned USD1’s involvement in politically sensitive cases. movement Expansion to major exchanges, related companies claim rejected.