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World Liberty Financial (WLFI) became the latest company on Wednesday to apply for a national credit bank card, joining digital asset firms such as Circle, Ripple, Fidelity Digital Assets, BitGo and Paxos, in a move aimed at expanding stablecoin services.
The announcement raised significant concern, as established banks argued that it represented an attempt to gain federal recognition while avoiding the stricter regulatory and supervisory requirements that apply to fully licensed national banks.
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Trump-backed WLFI applies for trust card
Trump-backed World Liberty Financial announced that its subsidiary WLTC Holdings LLC Submit a new settlement request To the Office of the Controller of the Currency (OCC) to create the World Liberty Trust Company, National Assembly (WLTC).
This entity is expected to operate as a national credit bank with… Primary focus on stablecoin activitySuch charters allow companies to operate throughout the United States under a single federal framework, eliminating the need for a separate license in each state.
Credit banks differ from traditional banks in that they often cannot accept deposits or grant loans.
Pending approval, WLFI said the WLTC will operate under full federal oversight andAdhere to the GENIUS codewith strict anti-money laundering standards, sanctions screening, and cybersecurity rules in place.
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Client assets will be segregated, with reserves managed independently, and operations subject to regular checks. Mac McCain, general counsel of World Liberty Financial, will serve as trustee officer.
Banking sector groups opposed itwho warned that issuing credit cards in this way can increase systemic risks while undermining the integrity and framework of the original bank card.
Banking groups challenge OCC trust licenses
One of the most controversial aspects of how dangerous these steps are centers on regulatory and oversight gaps.
Although cryptocurrency companies can achieve a similar status to banks, they are not subject to the full range of prudential regulations that traditional banks face, which include capital standards, liquidity and comprehensive risk management.
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Due to the continuous increase in popularity Cryptocurrency companies seeking these licensesThe banking sector has started issuing warnings.
Rebecca Romero Rainey, CEO of Independent Community Banks of America, said in a statement in December that the conditional approval of five national trust bank licenses by the Office of the Comptroller of the Currency (OCC) extends the national trust bank license beyond its statutory and historical purpose, puts consumers at risk, and creates institutions that the OCC does not have the ability to resolve in an order.
Traditional banks have also warned that this could create regulatory arbitrage, as cryptocurrency companies benefit from federal oversight without the same safeguards, and thus consumer protection and financial stability become vulnerable.
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National licenses for trust banks do not automatically include FDIC insurance of customer assets in the same way as retail banks.
If a cryptocurrency bank with a private license fails, clients may not receive the same insurance protection, which could lead to losses for individuals and institutions that misunderstand the risks.
This could undermine confidence in the wider financial system if widely used crypto banking services come under pressure or fail.
The OCC typically takes 12 to 18 months to evaluate national license applications for trust banks, which means the WLFI is unlikely to receive a final decision before 2027.
