ICBA Warns Kraken OCC Charter Bid Threatens US Bank Deposits and Financial Stability

ICBA Tells OCC to Rescind Interpretive Letter 1176 After Kraken Trust Charter Filing

Payward Inc., the parent company of Kraken, filed an application with the Office of the Comptroller of the Currency (OCC) for a national trust bank charter. The application arrives after Kraken secured access to a Federal Reserve master account and as Congress debates stablecoin legislation that would expand crypto firms’ direct reach into the federal banking system.

ICBA President and CEO Rebeca Romero Rainey explained, in a release shared with Bitcoin.com News on Monday, that the application is part of a pattern. Crypto firms are pursuing payment stablecoins, master account access, and national trust charters at the same time, she argued, without facing the same regulatory requirements as banks. It’s not the first time ICBA has issued such a response, as it made similar statements back in March.

Romero Rainey warned policymakers that together these moves create new channels for instability and could pull deposits away from community banks, cutting into lending for consumers, small businesses, and farmers.

The ICBA is asking the OCC to pause consideration of Kraken‘s application, rescind Interpretive Letter No. 1176, and begin a formal rulemaking to clarify what the national trust charter actually permits. The group argues the OCC’s shift under that interpretive letter allows nonbank fintech companies to receive a traditional trust charter while engaging in activities the charter was never intended to cover.

The ICBA recently published an issue brief warning policymakers about the cumulative impact of advancing multiple crypto-related policy initiatives at once. The brief is titled “ Stablecoins, Master Accounts and National Trust Charters: Community Bankers Urge a Pause on Policies for Unaccountable Entities.”

CLARITY Act and Yield-Bearing Stablecoins Under Fire

The pushback is not limited to community bankers. Rob Nichols, President and CEO of the American Bankers Association, sent a letter to bank CEOs on May 10, 2026, calling for immediate engagement ahead of the Senate Banking Committee’s scheduled vote on the CLARITY Act, a digital asset market structure bill.

Nichols urged bankers to contact senators directly through the ABA’s grassroots platform, mobilize staff and customers, and press for stronger language to close what banks are calling a stablecoin loophole. The concern centers on “interest-like rewards” tied to payment stablecoins, which banks argue could accelerate deposit flight regardless of whether those yields are paid directly or through affiliates.

Banking groups, including the ABA and the Bank Policy Institute as well, have also argued this deposit drain would reduce lending to consumers and businesses at scale. They support a near-total ban on yield-like payments tied to stablecoins, and they contend that a recent compromise from Senators Tillis and Alsobrooks does not go far enough to prevent evasion.

The other side of the debate draws a different picture. Stablecoins like USDC and USDT are often backed by short-term Treasuries or cash equivalents and have offered holders around 4% to 5% in recent rate environments, well above most traditional checking or savings accounts. Proponents argue this gives ordinary Americans more direct access to market-rate returns without depending on banks.

Some economists and crypto advocates have pointed to research suggesting the projected impact on bank deposits remains modest at the current scale, and they frame the bank lobbying as an effort to protect interest rate margins rather than address genuine systemic risk. Banks counter that at a larger scale, especially for community institutions, the effect on lending would be significant.

Patrick Witt, the Executive Director of the President’s Council of Advisors for Digital Assets, responded to the ABA CEO’s letter on social media.

“I specifically requested the attendance of Mr. Nichols and other bank trade CEOs at the meetings we hosted back in February to resolve the stablecoin rewards/yield issue. They refused,” Witt wrote on X. The high-ranking government official added:

“I guess the White House was beneath them? In their defense, I wouldn’t want to have to defend their position in public either.”

The CLARITY Act vote remains the immediate focal point. Banks have lobbied against stablecoin yield features since earlier versions of the legislation, including the GENIUS Act. Expect continued amendments and debate before any final vote moves forward.

The Kraken OCC application and the CLARITY Act now sit at the center of a broader question: whether crypto firms can access the federal banking system on their own terms, or whether Congress and regulators will require them to play by the same rules as banks before that access is granted.