Key Takeaways:
Senator Warren’s scrutiny over OCC trust charters intensified as crypto custody regulation drew broader attention. Crypto custody protections remained central as Belshe said client assets stay segregated from lending activity.Belshe argued that trust banks and fractional reserve banks should be classified under clearer terminology.“We do not take deposits. We do not lend customer assets. We do not commingle.”
Warren’s scrutiny covered Ripple National Trust Bank, Paxos Trust Company LLC, First National Digital Currency Bank, Fidelity Digital Asset Services, Bitgo Trust Company, Foris DAX National Trust Bank, National Digital Trust Company, Bridge National Trust Bank, and Coinbase National Trust Company.
Trust Charter Defense Centers on Risk, Reserves, and OversightNational trust banks already hold assets including art, bullion, jewelry, farmland, business interests, and digital credentials, Belshe wrote. He argued that digital assets fit within that fiduciary framework. Bitgo holds a South Dakota state trust charter from 2018, plus regulated entities or licenses in New York, Switzerland, Germany, Dubai, and Singapore.
Regulatory obligations for depository banks apply to different risks, Belshe wrote. Deposit insurance, capital rules, the Community Reinvestment Act, and Bank Holding Company Act supervision address institutions that borrow from depositors and lend at risk. Bitgo’s model, he said, avoids that activity through one-for-one fiduciary custody.
Belshe argued:
“The asset class does not change the structure.”
His closing invitation asked Warren to engage directly with Bitgo and its staff. Belshe said the company sought stronger oversight over the past decade and viewed the OCC charter as a federal extension of that approach, not an escape from supervision. He also proposed clearer terminology separating fractional reserve banks from reserve banks.
