Amid increasingly clear cryptocurrency regulations in the United States, stablecoin issuers are launching a new compliance race. Following Circle and Ripple, the stablecoin issuance platform Paxos recently submitted an application to the Office of the Comptroller of the Currency (OCC), seeking to obtain a national trust bank charter. This signifies that mainstream stablecoin institutions are shifting from technological competition to a direct contest over regulatory status, vying for the advantage of "becoming a bank."

Since the beginning of this year, as US legislative bodies accelerated the advancement of a stablecoin regulatory framework, stablecoin issuers began to reconsider their market positioning. Circle's USDC, Ripple's RLUSD, and Paxos-supported PYUSD all hold significant positions within the US digital payment system. Obtaining a bank or trust charter has become a critical pathway for them to integrate into the mainstream financial system, gain institutional trust, and directly access payment and clearing systems.

Crypto Giants Compete

According to a Decrypt report, if Paxos's application for a national trust bank charter is approved, it would allow the company to be regulated at the federal level, no longer limited by its New York state limited-purpose trust company license. This would enable it to provide services nationwide for stablecoin issuance, crypto asset custody, and payment clearing. A Paxos company spokesperson stated in a declaration that obtaining this charter would help it "operate under the highest regulatory standards" and further enhance customer trust.

In fact, Paxos had applied for a similar charter in 2020 and received conditional approval from the OCC in 2021. However, because it failed to complete the establishment process on schedule, the approval expired in 2023. During this period, the company had a compliance dispute with the New York Department of Financial Services (NYDFS) regarding the issuance of BUSD in partnership with Binance, ultimately reaching a settlement in 2024 with a fine of approximately $48.5 million.

Meanwhile, according to a Reuters report, Circle applied as early as June 2025 to establish a "National Digital Currency Bank," hoping to use a bank charter to custody USDC reserve assets and provide digital payment and clearing services for institutional clients. Ripple followed suit in July, announcing plans to apply for a national bank charter and seek a Federal Reserve master account, intending to enable its stablecoin RLUSD to directly access 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, and the key is to establish directly regulated connection channels."

The successive actions by these three companies indicate that competition in the stablecoin arena is shifting from market share to regulatory standing. CoinDesk quoted Alex Thorn, Head of Strategy at New York blockchain consultancy Galaxy Digital, saying: "This isn't just about crypto companies wanting licenses; it's the first time regulators are preparing to treat stablecoins as bank-grade financial products."

In past years, stablecoin issuers mostly relied on partnerships with traditional banks to manage reserve funds and clearing operations. This "shadow banking" model increased costs and was subject to the risks of partner banks. If they can obtain a bank or trust charter themselves, they can not only directly custody reserve funds and simplify compliance chains but also enhance asset transparency and security. Circle pointed out in its application documents submitted to the OCC that a bank charter would enable it to provide services for the circulation of financial institution-grade digital assets "under a unified regulatory framework."

Regulatory Window Opens

From a regulatory perspective, the OCC issued an announcement in May 2025 reiterating that licensed trust banks could engage in digital asset custody, settlement, and related services. This provided a compliance basis for crypto companies and became the direct policy trigger for this wave of applications. Justin Slaughter, Policy Director at crypto policy research firm Paradigm, noted in a CoinDesk interview: "The signal from the OCC is very clear – regulation is not about shutting them down, but inviting these companies into the system."

However, the path to approval remains long. The OCC has extremely high requirements for applicants regarding capital adequacy, risk management, anti-money laundering, and reserve asset transparency. Paxos, due to its compliance history being scrutinized, may face stricter regulatory assessment in its second application. Meanwhile, Ripple's historical litigation disputes with the US Securities and Exchange Commission (SEC) also cast uncertainty over its application outcome. The Financial Times quoted Simon Taylor, an analyst at London fintech advisory firm 11:FS, saying: "Circle is the most promising in this competition because it has a clear compliance record and a single business focus, while Paxos and Ripple still carry baggage from past cases."

Behind this round of the "charter race" is the practical pressure on the stablecoin industry to seek survival and legitimization. CoinMarketCap data shows that the circulating supply of stablecoins in the US has exceeded $300 billion, with USDT and USDC accounting for over 90% of the share. Against the backdrop of persistently narrowing cryptocurrency volatility and tightening regulation, the legal status of issuers, the security of asset custody, and transparency mechanisms have become key to market confidence. Licensed operation is seen as the only way to escape the "regulatory gray area."

A deeper motivation lies in the reshaping of the financial system. If stablecoin issuers can directly access the Federal Reserve's payment system as banks, not only would their clearing efficiency rival that of traditional financial institutions, but it would also change the mode of dollar circulation on-chain. Ripple CEO Garlinghouse emphasized: "We are not just issuing stablecoins; we are building a dollar payment network that meets regulatory standards."

The attitude of US regulators is also changing. In July 2025, the US Congress passed the Stablecoin Clarity Act, requiring all dollar-pegged stablecoins to be issued by federally or state-licensed entities and to disclose 100% of their reserve asset composition. This provides a policy advantage for companies like Circle, Ripple, and Paxos that applied for charters early. CoinDesk cited Aaron Klein, a senior fellow at the Brookings Institution, who stated: "The passage of the act means stablecoins are formally entering the US regulatory system, which will determine which companies can stay and which will be eliminated."

From a market perspective, whoever gets approved first will become the industry's compliance template and potentially attract institutional-level capital inflows. Galaxy Digital analyst Thorn pointed out: "In the future, stablecoin issuers will look more like banks, and banks will look more like stablecoin companies."