The Federal Charter Race: Galaxy Files for a Trust Bank as Crypto Giants Line Up

Six weeks after the CLARITY Act’s legislative defeat, OCC trust charters have become the institutional gateway into the federal financial system. Ripple secured final approval, Galaxy filed its application, community banks were invited in, and ICBA’s lawsuit keeps the race uncertain.

Galaxy Files: The BitGo Deal of Four Years Ago, Completed Differently

On October 29, Galaxy Digital (Nasdaq: GLXY) announced that its subsidiary Galaxy Digital LP had submitted an application to the Office of the Comptroller of the Currency (OCC) to establish Galaxy National Bank, a proposed national trust bank headquartered in New York. If approved, the bank would operate under the OCC’s federal oversight framework, providing digital asset custody, trading and staking services along with fiduciary investment advisory services, serving clients nationwide under a single federal framework.

Galaxy founder and CEO Mike Novogratz said in the announcement: “Digital assets are becoming an increasingly important part of the global financial system, and Galaxy has spent years building the capabilities to support that transition. A national trust charter would be an important next step, allowing us to bring more of our services under a single federal framework.”

The application’s backstory traces back four years. In 2022, Galaxy’s $1.2 billion acquisition of BitGo collapsed at the closing stage, becoming one of the most famous failed deals in crypto history. Four years later, Galaxy is filling in its custody capabilities through its own path: the firm currently holds more than 50 licenses, including an SEC-registered broker-dealer (a FINRA member), a CFTC-registered swap dealer, a UK subsidiary authorized by the FCA, and a BitLicense and money transmission license recently granted by the New York State Department of Financial Services (NYDFS).

Galaxy’s ambitions extend beyond finance. The company operates a 5.7 GW data center pipeline at its Helios campus in Texas, making it a player in both crypto finance and AI compute infrastructure. If the trust charter is approved, its institutional business would receive federal banking regulatory backing for the first time, allowing it to compete directly with Coinbase Custody and Fidelity Digital Assets in the regulated custody market.

Ripple Goes First: The Trust Bank Becomes the Custody Layer for Stablecoin Reserves

One day before Galaxy filed, Ripple announced at Swell 2026 that it had received final OCC approval for Ripple National Trust Bank (RNTB). The trust bank obtained conditional approval in December 2025 and took about ten months to satisfy all preconditions. According to Ripple’s disclosure, RNTB’s approved activities include managing RLUSD’s segregated reserves, serving as collateral trustee for those reserves, and providing fiduciary digital asset custody services once it opens.

The RLUSD architecture is worth noting: RLUSD remains issued by Standard Custody & Trust Co., Ripple’s limited-purpose trust company regulated by NYDFS, while the trust bank handles reserve custody and collateralization, with BNY serving as the primary reserve custodian. This three-layer structure of “issuer plus reserve custodian plus bank collateral trustee” is precisely the standard form the market anticipated after the GENIUS Act takes effect on January 18, 2027. RLUSD’s market cap stands at roughly $2.6 billion, up more than 88% this year, and it is listed on major platforms including Coinbase, Robinhood, Binance, Kraken and OKX.

The results Ripple published the same day also show a company in transition: it expects to exit 2026 with $900 million in annualized product revenue, customer and partner count tripled this year, and cumulative payment network transaction volume approaching $150 billion. With 85 licenses plus the federal backing of a trust bank, Ripple has completed its transformation from a cross-border payments company into a regulated digital asset bank.

OCC Courts Community Banks: Delegating Stablecoin Issuance Downward

The other end of the charter race is community banks. On October 26, the OCC issued a statement encouraging community banks to consider becoming permitted payment stablecoin issuers under the GENIUS Act, or to establish subsidiaries for such activities. On October 27, Comptroller Jonathan Gould reiterated that the final rule calibrates requirements to an issuer’s size and risk, applying the same standards to bank and nonbank issuers to create a level regulatory playing field.

The OCC’s core selling points are twofold: community bank deposits can count directly as eligible reserve assets backing a stablecoin, keeping funds on their own balance sheets; and supervision will be tailored to each issuer’s size and risk profile, giving smaller issuers a relatively lighter compliance burden. This is part of Gould’s Community Bank Comeback initiative, which aims to keep local banks present in the new payments infrastructure.

Working examples already exist in the market: a Coinbase and Moov partnership gives more than 1,000 U.S. banks and credit unions access to stablecoin payment capabilities, while a Stablecore and Jack Henry FIN integration covers more than 1,500 financial institutions. The OCC has also granted conditional approvals for crypto banking applications from Revolut and OpenReserve. But the OCC has made clear this does not mean automatic licensing. Any bank still needs to satisfy applicable requirements and obtain the necessary approvals to become a permitted issuer before the January 18, 2027 compliance deadline.

Litigation and Doubts: The Fragility of the Administrative Path

The other side of the charter race is legal challenges. The Independent Community Bankers of America (ICBA) has sued the OCC in federal court, arguing that crypto trust charters constitute a “side door” into the banking system that bypasses capital adequacy requirements, consolidated supervision and FDIC insurance. ICBA previously estimated that stablecoin adoption would cut community banks’ lending capacity by nearly $850 billion. Senator Elizabeth Warren also wrote to Comptroller Gould, arguing that the national trust charter approvals for firms including Coinbase and Ripple violate the National Bank Act.

This exposes the weakness of the entire administrative path. After the CLARITY Act failed 49-50 on September 15, OCC trust charters, SEC rules and CFTC rules became the substitutes. But SEC Chair Paul Atkins himself has acknowledged that administrative rules can be reversed by the next administration without a single congressional vote, and only legislation provides durable certainty. Galaxy and Ripple are lining up for trust charters precisely because they are betting on the two-year window left for this administration.

Key Takeaways for Practitioners