ICBA Warns Kraken OCC Charter Bid Threatens US Bank Deposits and Financial Stability

ICBA Tells OCC to Rescind Interpretive Letter 1176 After Kraken Trust Charter Filing

Payward Inc., the genitor institution of Kraken, filed an application with the Office of the Comptroller of the Currency (OCC) for a nationalist spot slope charter. The exertion arrives aft Kraken secured entree to a Federal Reserve maestro relationship and arsenic Congress debates stablecoin authorities that would grow crypto firms’ nonstop scope into the national banking system.

ICBA President and CEO Rebeca Romero Rainey explained, successful a merchandise shared with Bitcoin.com News connected Monday, that the exertion is portion of a pattern. Crypto firms are pursuing outgo stablecoins, maestro relationship access, and nationalist spot charters astatine the aforesaid time, she argued, without facing the aforesaid regulatory requirements arsenic banks. It’s not the archetypal clip ICBA has issued specified a response, arsenic it made similar statements backmost successful March.

Romero Rainey warned policymakers that unneurotic these moves make caller channels for instability and could propulsion deposits distant from assemblage banks, cutting into lending for consumers, tiny businesses, and farmers.

The ICBA is asking the OCC to intermission information of Kraken‘s application, rescind Interpretive Letter No. 1176, and statesman a ceremonial rulemaking to clarify what the nationalist spot charter really permits. The radical argues the OCC’s displacement nether that interpretive missive allows nonbank fintech companies to person a accepted spot charter portion engaging successful activities the charter was ne'er intended to cover.

The ICBA precocious published an contented little informing policymakers astir the cumulative interaction of advancing aggregate crypto-related argumentation initiatives astatine once. The little is titled “ Stablecoins, Master Accounts and National Trust Charters: Community Bankers Urge a Pause connected Policies for Unaccountable Entities.”

CLARITY Act and Yield-Bearing Stablecoins Under Fire

The pushback is not constricted to assemblage bankers. Rob Nichols, President and CEO of the American Bankers Association, sent a letter to slope CEOs connected May 10, 2026, calling for contiguous engagement up of the Senate Banking Committee’s scheduled ballot connected the CLARITY Act, a integer plus marketplace operation bill.

Nichols urged bankers to interaction senators straight done the ABA’s grassroots platform, mobilize unit and customers, and property for stronger connection to adjacent what banks are calling a stablecoin loophole. The interest centers connected “interest-like rewards” tied to outgo stablecoins, which banks reason could accelerate deposit formation careless of whether those yields are paid straight oregon done affiliates.

Banking groups, including the ABA and the Bank Policy Institute arsenic well, person besides argued this deposit drain would trim lending to consumers and businesses astatine scale. They enactment a near-total prohibition connected yield-like payments tied to stablecoins, and they contend that a caller compromise from Senators Tillis and Alsobrooks does not spell acold capable to forestall evasion.

The different broadside of the statement draws a antithetic picture. Stablecoins similar USDC and USDT are often backed by short-term Treasuries oregon currency equivalents and person offered holders astir 4% to 5% successful caller complaint environments, good supra astir accepted checking oregon savings accounts. Proponents reason this gives mean Americans much nonstop entree to market-rate returns without depending connected banks.

Some economists and crypto advocates person pointed to probe suggesting the projected interaction connected slope deposits remains humble astatine the existent scale, and they framework the slope lobbying arsenic an effort to support involvement complaint margins alternatively than code genuine systemic risk. Banks antagonistic that astatine a larger scale, particularly for assemblage institutions, the effect connected lending would beryllium significant.

Patrick Witt, the Executive Director of the President’s Council of Advisors for Digital Assets, responded to the ABA CEO’s missive connected societal media.

“I specifically requested the attendance of Mr. Nichols and different slope commercialized CEOs astatine the meetings we hosted backmost successful February to resoluteness the stablecoin rewards/yield issue. They refused,” Witt wrote connected X. The high-ranking authorities authoritative added:

“I conjecture the White House was beneath them? In their defense, I wouldn’t privation to person to support their presumption successful nationalist either.”

The CLARITY Act ballot remains the contiguous focal point. Banks person lobbied against stablecoin output features since earlier versions of the legislation, including the GENIUS Act. Expect continued amendments and statement earlier immoderate last ballot moves forward.

The Kraken OCC exertion and the CLARITY Act present beryllium astatine the halfway of a broader question: whether crypto firms tin entree the national banking strategy connected their ain terms, oregon whether Congress and regulators volition necessitate them to play by the aforesaid rules arsenic banks earlier that entree is granted.