The Office of the Comptroller of the Currency (OCC) has granted preliminary conditional approval for the World Liberty Trust Company to operate as a national trust bank. This regulatory milestone allows the venture, which is partially owned by President Donald Trump and his family, to advance plans for issuing and managing its USD1 stablecoin under federal supervision, according to a letter posted on the OCC’s website.
Regulatory Oversight and Operational Scope
The conditional approval marks a significant step for World Liberty Financial, a project co-founded by the Trump family and the Witkoff family. According to the OCC, the national trust charter will permit the firm to custody assets, manage reserves, and issue the USD1 stablecoin. Unlike traditional commercial banks, this charter does not authorize the firm to engage in general deposit-taking or lending activities, as noted by Reuters.
Zach Witkoff, President and Chairman of World Liberty Trust, described the approval as a milestone that brings the company’s operations under the same standards that have governed traditional banking institutions for generations. The firm stated that it welcomes continuous federal scrutiny. To reach final approval, the company must satisfy several conditions, including maintaining a minimum of $20 million in capital, appointing a qualified internal audit manager, and notifying the regulator of any material changes to its business model.
Pro Tip: When evaluating crypto-backed financial institutions, look for clear disclosures regarding regulatory supervision. A national trust bank charter requires adherence to federal standards, which differ significantly from the requirements placed on unregulated digital asset exchanges.
Addressing Conflict of Interest Concerns
The OCC’s decision follows a period of public comment during which concerns were raised regarding the involvement of the Trump family, potential foreign investment, and the nature of stablecoin regulation. According to the OCC’s official correspondence, staff reviewed the application using established procedures for de novo bank charters, ensuring consistency with statutory and policy requirements.
The regulator specifically addressed concerns about foreign ownership by noting that non-U.S. investors are not considered principal shareholders. Reuters reported that several investors, including an investment vehicle led by Eric Trump, signed passivity agreements. These agreements stipulate that the investors will not attempt to control or influence the bank’s day-to-day operations or strategic decisions.
Broader Industry Context
The move comes as various crypto firms seek federal charters to provide institutional-grade services. Reuters reported that the OCC has previously granted preliminary approval for similar trust charters to companies like Ripple and Circle under Comptroller Jonathan Gould. An OCC official told FOX Business that a robust pipeline of new banks is vital for a healthy financial system, as new entrants introduce competition and innovation.
World Liberty Financial currently lists its ownership structure as 38% held by an entity affiliated with Donald J. Trump and certain family members. The project, which also counts Robert Witkoff as a director, aims to strengthen the role of the U.S. dollar in the global economy through its digital dollar initiative.
Frequently Asked Questions
- What does a national trust bank charter allow? It allows a firm to custody assets, manage reserves, and perform trust activities under federal oversight. It does not generally allow for traditional lending or deposit-taking.
- Is the bank fully operational? No. The OCC granted preliminary conditional approval. The firm must still meet specific requirements, such as capital thresholds and staffing mandates, before receiving final authorization to open.
- Who owns World Liberty Financial? According to its website, 38% of the firm is owned by an entity affiliated with Donald J. Trump and his family members.
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