OCC Gives World Liberty a Conditional Path to a National Trust Bank
World Liberty can advance plans to issue and custody USD1 under a federal trust charter, but final authorization still depends on capital, liquidity, governance and compliance conditions.
The Office of the Comptroller of the Currency has given World Liberty Financial’s proposed trust bank a preliminary route into the federal banking system. The decision is consequential, but it is not permission to open for business. World Liberty Trust Company must complete a demanding set of pre-opening requirements before the OCC grants final authorization.
The regulator’s August 14 decision would place three core functions under one federally supervised entity: issuance and redemption of the dollar-backed USD1 stablecoin, management of the assets supporting it, and fiduciary custody of digital assets for institutional customers. The proposed bank would also offer limited conversion services, allowing custody clients to exchange approved stablecoins for USD1 in connection with assets already held at the bank.
World Liberty Trust would be a wholly owned subsidiary of WLTC Holdings and based in Bay Harbor Islands, Florida. It plans to take over USD1 issuance, custody and reserve responsibilities from BitGo Bank & Trust, which currently performs those functions. The OCC approved that planned transfer under an exemption from some restrictions on affiliate transactions, while leaving the transaction subject to safety-and-soundness requirements.
The fine print matters. The trust bank must maintain at least $20 million of Tier 1 capital. At least half of that capital, or $10 million if greater, must be held in eligible liquid assets. It must separately maintain eligible liquid assets equal to 180 days of operating expenses, including the costs that would apply in a distressed wind-down. Those requirements remain in force during the first three years of operation, when the OCC also intends to control significant deviations from the approved business plan.
The bank cannot quietly expand into a conventional deposit-and-lending model. It must limit itself to trust-company operations and related activities, and it has committed not to become a bank for purposes of the Bank Holding Company Act. It does not plan to seek a Federal Reserve master account. Its stablecoins would not be insured deposits, and the bank would not be covered by the Community Reinvestment Act because it would not be an FDIC-insured depository institution.
The OCC also made future stablecoin rules an explicit condition of approval. If USD1 issuance or redemption does not comply with the GENIUS Act and its implementing regulations, World Liberty Trust must change, cease or divest those activities. That provision turns the charter into a supervised operating framework rather than a permanent exemption from rules still being completed.
Governance will receive close scrutiny. The OCC must raise no objection before the bank appoints directors or senior executives, including its chief compliance, information security and trust officers. The bank must designate an independent internal-audit manager, engage an external auditor and establish adequate fidelity-bond coverage before opening. It must also provide at least 60 days’ notice before materially changing its products, risk limits or operating plan.
The decision followed seven public comments from four commenters. Critics challenged the OCC’s authority, the application’s transparency, the absence of deposit insurance, potential conflicts of interest and the role of foreign investors. The OCC said career staff reviewed the application under established procedures and would supervise the bank. It also said the bank will not issue, custody or deal in WLFI tokens, distinguishing the proposed trust company from the wider World Liberty Financial business.
Political risk nevertheless remains inseparable from the commercial story. President Donald Trump and members of his family have financial ties to World Liberty Financial, while the OCC is led by a presidential appointee. The agency said investors who might otherwise raise control concerns supplied passivity commitments and that the relevant foreign investors do not own or control the proposed bank. Those answers form part of the regulatory record, but they will not end congressional scrutiny of ownership, conflicts and anti-money-laundering controls.
For the stablecoin industry, the broader signal is that federal trust charters are becoming a practical route for issuers seeking nationwide custody and reserve-management authority. A single OCC-supervised entity can be easier for institutional clients to assess than a patchwork of state licenses and outsourced relationships. The trade-off is continuous prudential supervision, prescribed liquidity and capital, formal governance controls and limits on how the business can evolve.
Why it matters
The approval brings stablecoin issuance closer to the institutional banking perimeter while preserving a clear distinction between a trust bank and a conventional insured bank. For World Liberty, internalizing USD1 issuance and reserves could improve control over economics, settlement and counterparties. For customers and competing issuers, the decision establishes a detailed benchmark for capital, liquidity, custody and governance expectations. The most important uncertainty is execution: World Liberty Trust cannot operate until it satisfies the OCC’s pre-opening conditions and receives final authorization.