World Liberty Financial, the Trump family-linked decentralized finance (DeFi) firm, cleared its first major banking hurdle on Friday after the U.S. Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval for a national trust bank.
Key Takeaways
World Liberty won conditional OCC approval Aug. 14 for its $4 billion USD1 operation.OCC requires World Liberty Trust to hold at least $20 million in tier 1 capital.World Liberty has 18 months to open its bank after clearing OCC requirements.World Liberty Financial arrived in late 2024 as a crypto and DeFi platform tied to the Trump and Witkoff families. An entity affiliated with President Donald Trump and certain family members owns a 38% stake. Zach Witkoff, the company’s CEO, is proposed as president and chairman of the new trust company.
Bitgo Bank & Trust currently manages USD1 issuance and custody through an exclusive arrangement. If the bank wins final authorization, World Liberty intends to acquire USD1 reserve assets and associated liabilities from Bitgo, pulling more of the stablecoin’s plumbing directly under its own roof.
OCC Attaches a Long List of ConditionsThe charter is not a conventional banking license that lets World Liberty operate like an ordinary consumer bank. The proposed institution would instead run as a national trust company centered on fiduciary and related activities rather than accepting traditional deposits or issuing commercial loans.
The OCC’s preliminary approval includes USD1 issuance and redemption, reserve maintenance, digital asset custody, and conversion services, allowing eligible customers to swap approved stablecoins for USD1. World Liberty contends that putting those functions inside one federally supervised institution could give USD1 more appeal for institutional payments, settlement and treasury operations.
Permission to actually open, however, comes with considerably more heavy lifting. World Liberty Trust Company must hold at least $20 million in tier 1 capital, with the greater of $10 million or 50% kept in eligible liquid assets. It must also carry sufficient liquidity to cover 180 days of operating expenses.
The company must build compliance systems, install an independent internal audit manager, and put senior officers and directors through OCC review. It must also clear requirements covering anti-money laundering (AML) controls, information technology, insurance coverage, and a pre-opening examination.
World Liberty is racing a clock as well. The preliminary approval dies if the required capital is not raised within 12 months or the bank fails to open within 18 months. The proposed institution must also apply for stock in a Federal Reserve Bank.
Political Scrutiny Follows the Banking PushThe application has drawn criticism over the Trump family’s financial stake in World Liberty and questions surrounding foreign investors. Democratic lawmakers and other critics argue that those relationships could create conflicts while federal regulators weigh the company’s banking ambitions.
The OCC said certain investors signed passivity agreements barring them from controlling or influencing bank operations. It also said the application followed statutory and ethical requirements, with career staff participating and future supervision handled by nonpolitical examiners.
Witkoff called the decision a milestone, saying the charter would bring USD1 issuance, custody, and reserve management together beneath OCC supervision.
The approval also follows preliminary charter decisions for other crypto businesses as more digital asset firms pursue direct federal oversight rather than navigating layers of intermediaries and state requirements.
Final Approval Becomes the Next TestWorld Liberty still needs to raise capital, construct compliant systems and survive regulatory examinations before the bank can open. The OCC retains authority to modify, suspend or rescind its preliminary decision if conditions change.
