Advocates say the structure fits within the narrow scope the OCC laid out in Letter 1183. Critics say it does not.
Community bank groups and consumer advocates want clearer, more public explanations of those mechanics.
ICBA’s main point is that a trust charter could let a large corporate owner offer a product that looks like a deposit but lacks deposit insurance and typical bank obligations.
They called this a form of regulatory arbitrage and warned it could create unfair competition for smaller banks. The National Community Reinvestment Coalition also filed opposition, arguing the OCC lacks authority to treat a stablecoin issuer like a traditional bank and calling for stronger consumer protections.
Those groups have focused on three practical concerns: consumer confusion about what is and is not insured, unclear reserve transparency, and the lack of tested tools to resolve a trust bank that holds crypto assets.
The letters stress the potential consequences of a run on a large stablecoin and the difficulty of unwinding token custody in a crisis.
If a federally chartered trust issues a widely used stablecoin, it could set a legal precedent that other tech firms or financial firms might follow.
The risks are not just theoretical. Under stress, reserve assets might be sold quickly, and digital holdings could be hard to transfer within a receivership framework that was built for traditional assets.
Featured image from Wikimedia Commons, chart from TradingView
