As US crypto regulation becomes increasingly clear, stablecoin issuers are embroiled in a new compliance race. Following Circle and Ripple, stablecoin issuing platform Paxos recently submitted an application to the Office of the Comptroller of the Currency (OCC) seeking a national trust bank license. This signifies that major stablecoin institutions are shifting from a technological competition to a head-on battle for regulatory status, vying for the opportunity to become "banks." This year, as US lawmakers have accelerated the development of a stablecoin regulatory framework, stablecoin issuers have begun to rethink their market positioning. USDC (issued by Circle), RLUSD (launched by Ripple), and PYUSD (backed by Paxos) all occupy a crucial position in the US digital payment system. Obtaining a bank or trust charter is a key path for them to integrate into the mainstream financial system, gain institutional trust, and directly access the payment and clearing system. Crypto giants are vying for a national trust bank charter. According to Decrypt, if Paxos's application for a national trust bank charter is approved, it will allow it to be regulated at the federal level, rather than being constrained by New York's limited trust company license. This will enable it to provide stablecoin issuance, crypto asset custody, and payment and clearing services nationwide. A Paxos spokesperson stated in a statement that obtaining this charter will help it "operate under the highest regulatory standards" and further enhance customer trust. In fact, Paxos applied for a similar license in 2020 and received conditional approval from the OCC in 2021. However, due to failure to complete the establishment procedures on time, the approval expired in 2023. During this period, the company had a dispute with the New York Department of Financial Services (NYDFS) over compliance issues related to its partnership with Binance to issue BUSD. The company ultimately reached a settlement in 2024, paying a fine of approximately US$48.5 million. Meanwhile, according to Reuters, Circle applied to establish a "national digital currency bank" as early as June 2025, hoping to use a banking license to custody USDC reserve assets and provide digital payment and clearing services to institutional clients. Ripple followed suit in July, announcing plans to apply for a national banking charter and seek Federal Reserve master account status, aiming to provide its stablecoin, RLUSD, with direct access to the federal payment system. Ripple CEO Brad Garlinghouse stated in an interview, "We believe stablecoins will play the same role as bank accounts in cross-border payments in the future. The key is to establish a direct, regulated connection." The successive actions of these three companies indicate that the competition in the stablecoin market is shifting from market share to institutional status. CoinDesk quoted Alex Thorn, head of strategy at Galaxy Digital, a New York blockchain consulting firm, as saying: "This is not just a question of crypto companies wanting licenses, but rather the first time regulators are prepared to treat stablecoins as bank-grade financial products."
In the past few years, stablecoin issuers have mostly partnered with traditional banks to manage reserve funds and clearing operations. This "shadow banking" model not only increases costs but is also subject to the risks of partner banks. If a bank or trust license can be obtained independently, it can not only directly custody reserve funds and simplify the compliance chain, but also improve asset transparency and security. Circle stated in its application submitted to the OCC that a banking license will enable it to "provide services for the circulation of digital assets at the level of financial institutions under a unified regulatory framework." The regulatory window is open. From a regulatory perspective, the U.S. Office of the Comptroller of the Currency issued an announcement in May 2025 reaffirming that licensed trust banks can engage in digital asset custody, settlement, and related services. This provides a compliance basis for crypto companies and served as the direct policy trigger for this surge in applications. Justin Slaughter, policy director at crypto policy research organization Paradigm, told CoinDesk, "The OCC's signal is very clear—regulation isn't about blocking these companies, but about inviting them into the system." However, the road to approval remains long. The OCC has extremely high requirements for applicants in terms of capital adequacy, risk management, anti-money laundering, and transparency of reserve assets. Paxos's previous compliance history has led to scrutiny, and its second application may face a stricter regulatory assessment. Ripple's historical litigation with the U.S. Securities and Exchange Commission (SEC) also casts uncertainty over the outcome of its application. The Financial Times quoted Simon Taylor, an analyst at London-based fintech consultancy 11:FS, as saying, "Circle holds the best chance in this competition because of its clear compliance record and single business focus, while Paxos and Ripple are still burdened by past legal cases." Behind this round of competition for licenses lies the real-world pressures of the stablecoin industry seeking survival and legitimacy. CoinMarketCap data shows that the total amount of stablecoins in circulation in the United States has exceeded $300 billion, with USDT and USDC accounting for over 90% of this share. Amidst declining cryptocurrency volatility and tightening regulation, the legal status of issuers, secure asset custody, and transparent mechanisms are crucial for market confidence. Licensing is seen as the only way to escape this regulatory gray area. The deeper motivation lies in the restructuring of the financial system. If stablecoin issuers can directly access the Federal Reserve's payment system as banks, not only will clearing efficiency rival that of traditional financial institutions, but it will also transform the way the US dollar circulates on-chain. Ripple CEO Garlinghouse once emphasized, "We're not just issuing stablecoins; we're building a regulatory-compliant US dollar payment network." US regulators are also shifting their stance. In July 2025, the US Congress passed the Stablecoin Clarity Act, requiring all dollar-pegged stablecoins to be issued by a federally or state-licensed institution and to disclose 100% of their reserve asset composition. This provides favorable policy conditions for companies like Circle, Ripple, and Paxos that applied for licenses early. CoinDesk quoted Aaron Klein, a senior fellow at the Brookings Institution, as saying, "The passage of the bill officially marks the entry of stablecoins into the US regulatory system, which will determine which companies remain and which are eliminated." Market expectations suggest that whichever company is first to receive approval will become a model for industry compliance and potentially attract institutional capital. Galaxy Digital analyst Thorn pointed out: "In the future, stablecoin issuers will be more like banks, and banks will be more like stablecoin companies."
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