In one of the most significant regulatory events for the US fintech sector in 2025, US banking regulators have granted conditional approval bank charter applications for five nonbank fintechs.
These weren’t full traditional banking charters (which allow taking insured deposits), but rather national trust bank charters—a type of banking license that allows certain banking functions including custody of assets and fiduciary services. Among the recipients were Ripple National Trust Bank and the First National Digital Currency Bank which, among the others, will join the approximately 60 other national trust banks that are currently supervised by the Comptroller of the Currency (OCC).
While broadly welcomed by the fintech sector, which has been struggling to obtain federal banking charters for years, the move also triggered significant backlash from community banking advocates and other regulators. Critics argued that granting national bank charters to fintechs—especially those involved in crypto—could further blur the lines of what it means to be a bank. There are also fears that the trend could lead to new entrants sidestepping some of the stricter rules that full-service banks face, granting an unfair advantage while also potentially damaging consumer trust. One key point of contention is that trust banks are not required to have federal deposit insurance, for example.
Naturally, the initial approval of these charters presents a huge win for fintech and crypto firms, which are enjoying less red tape and clearer, more uniform rules under the current US administration. For instance, having a national trust bank charter could allow fintechs like Ripple to custody crypto assets or even facilitate crypto-based payments for institutional clients under a federal regime. However, the OCC has attached several conditions, namely that fintech trust banks must meet the same “rigorous review and standards” as others. They will also likely have to maintain high levels of capital and will be restricted from taking on certain activities deemed excessively high risk.
Despite the expected pushback from other financial services sectors, it’s clear that these charters are not a free pass. Rather, the idea is that the same activities carry the same risks and therefore require the same level of regulation. While obtaining a charter still carries a heavy compliance burden, these latest developments set a precedent where fintechs—especially those involved in payments, custody, or lending—should seriously consider these new regulatory avenues as part of their business strategy. After all, the benefits—such as access to federal services, preemption of state laws, and increased customer trust—are undeniable.