USD1 Wins Conditional OCC Charter for $4 Billion Stablecoin

Crypto News

The OCC, the federal banking regulator, has granted preliminary conditional approval to World Liberty Trust Company, clearing a path for the Trump-linked firm to operate a national trust bank focused on the USD1 stablecoin. The decision letter, posted Friday, allows the proposed entity to carry out fiduciary and trust-company activities, with final authorization dependent on preopening requirements. The company applied in January and sought a narrow federal role tied to World Liberty Financial’s fiat-backed token. Under the plan, World Liberty Trust would issue USD1 to institutional clients across the United States and take over the function currently handled by BitGo Bank & Trust, National Association. The letter describes USD1 as a fiat currency-backed stablecoin and says custody services would be provided mainly for USD1 customers and additional institutional clients. The approval does not create a federally insured depository institution, nor does it classify the entity as a bank under the Bank Holding Company Act. It also does not provide a Federal Reserve master account. The regulator stated that career staff reviewed the application for consistency with legal and regulatory requirements, and that the preliminary clearance reflects the information and commitments supplied by the applicant. Unlike algorithmic stablecoins, USD1 is described as backed by fiat currency reserves.

The decision places a federally supervised trust company inside the Trump family’s crypto business, because President Donald Trump appointed Comptroller Jonathan Gould to lead the OCC last year. The unit submitted its application at the start of January, and congressional Democrats spent the following months arguing that approval would create a conflict of interest. The OCC addressed that concern in the letter, saying career examiners handled the review and that Gould satisfied the legal and ethics obligations attached to his role. After opening, the bank is expected to be supervised by nonpolitical examiners. The agency’s position inside the Treasury Department and its lack of a bipartisan board sharpened the debate, especially after Democrats pressed Gould during a February hearing to release an unredacted version of the filing. The public application omitted capital structure and business-plan specifics. The economic stakes are large: public estimates put Trump family earnings from USD1 at about $50 million through June 2026, while World Liberty Financial had sent over $1.6 billion to the president and his sons by April. Zach Witkoff, who leads World Liberty Financial and is the son of special envoy Steve Witkoff, is slated to chair the bank. Robert Witkoff and Scott Alper are proposed as directors. That governance structure keeps control within a close circle around the president.

USD1 was priced near $1, with market value around $4.02 billion, making it the 23rd-largest digital asset and placing it above many altcoin projects by value. BitGo currently performs issuance and reserve safekeeping, but the charter would move both roles inside World Liberty once final approval is received. Once cleared, the firm plans to create and retire USD1 itself, keep the supporting dollar and Treasury money-market assets, and process institutional payments under one federal authorization. Regulatory conditions include $20 million in capital, prior notice for significant strategy shifts, and a qualified internal audit manager. The permission stops short of full banking because retail deposits and loans are barred. It also does not function as an airdrop or a yield program for existing holders, whose positions remain unchanged until the conditions are satisfied. Circle already obtained final OCC clearance in July, and both Ripple and Crypto.com possess conditional trust approvals. Traditional lenders have considered lawsuits because such charters give crypto firms federal recognition without complete bank oversight. The arrangement remains institutional, distinct from consumer AI crypto wallet products. That means the near-term effect is operational rather than monetary, with USD1’s peg and reserve management becoming the central compliance test for the proposed trust company.

COINOTAG’s reading is that the OCC letter turns USD1 into a test case for politically exposed stablecoin infrastructure. The document grants only preliminary conditional approval, not a final banking license, and binds World Liberty Trust Company to preopening requirements before operations begin. It explicitly limits the entity to fiduciary and trust activities, denies federal deposit insurance and a Fed master account, and leaves reserve custody under federal examination. The thematic arc is clear: Washington is folding dollar-backed tokens into the regulated perimeter, while Congress challenges the governance path. The decisive question is whether the conditions become enforceable supervision or remain procedural hurdles.