The federal banking regulator granted preliminary conditional approval on Friday to World Liberty Trust Company, the entity set up to issue the USD1 stablecoin. The application had been filed in January. The bank will be able to issue, redeem and custody digital assets for institutional clients, without ever becoming a deposit-taking institution. Elizabeth Warren has already announced legislation in response.
Key Takeaways
- World Liberty Trust Company secures preliminary conditional approval from the OCC, seven months after filing.
- The charter covers USD1 issuance and institutional custody, not insured deposits or lending.
- USD1 holds a $4B market cap and ranks fourth among stablecoins behind Tether and USDC.
A Trust Charter That Rules Out Deposits and Lending
The approval carries a precise label: preliminary and conditional. It clears a path without guaranteeing anything, since final authorization to commence business still hangs on preopening requirements. The regulator keeps the option of pulling it.
The perimeter is narrow by design. The entity will not become a federally insured depository institution, will not be defined as a bank under the Bank Holding Company Act, and will not seek a master account at the Federal Reserve. It will not grant credit to the public in the ordinary course of business either. The contrast with commercial retreats elsewhere in the Trump orbit is sharp, as when three crypto ETFs were pulled after demand cratered.
What the structure may actually do fits into four lines of business: issuing and redeeming USD1, running fiat on-ramps and off-ramps, providing custody and conversion of digital assets, and serving institutional clients such as market makers, exchanges and investment firms. The decision published by the regulator under number 1385 places the main office at 1177 Kane Concourse in Bay Harbor Islands, Florida, in segregated but shared premises alongside two affiliates.
The regulator grounds its decision in a thorough evaluation of all information available to it. The wording stays cautious, and for good reason: the same authority handed conditional approvals to Coinbase, Paxos, BitGo, Ripple and Circle over recent months.
This is not an isolated favor but a doctrine applied to an entire queue. What is new is the identity of the beneficiary, not the nature of the charter: World Liberty arrives behind five established players.
USD1 Leaves BitGo for Its Own Bank
The stablecoin changes technical guardian. World Liberty takes over from BitGo Bank & Trust as issuer and custodian of the reserves backing USD1.
The stakes are far from symbolic. An issuer relying on a third party to hold its reserves inherits that party’s commercial terms and counterparty risk. Bringing the function in-house removes the dependency and turns the charter into a strategic asset rather than a regulatory badge.
The size of the token justifies the move. USD1 carries a $4B market cap and sits fourth worldwide among stablecoins, behind Tether and USDC. At that scale, reserve logistics stop being an operational detail and become the model itself, much as payment use cases show where a Japanese logistics firm pays 2,300 drivers in stablecoin.
Operational leadership goes to Zack Witkoff, son of Donald Trump’s Middle East special envoy. On the regulator’s side, the file was handled under Jonathan Gould, formerly chief legal officer at Bitfury.
That overlap in career paths between supervisor and supervised fuels the criticism without amounting to an irregularity in itself. It mostly describes a sector where moves between industry and authorities have become routine.
The trust charter format explains part of the appeal. It grants federal legitimacy and a national footprint without dragging the holder into the capital and supervision regime that applies to a deposit-taking bank. For a stablecoin issuer, that trade is close to ideal.
The limits are just as real. No insured deposits means no retail funding base, and no Federal Reserve master account means settlement still runs through a correspondent bank. The charter buys standing, not independence.
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Warren Readies a Bill Against the Presidential Bank
Congressional opposition was in place before the decision landed. Democratic lawmakers led by Elizabeth Warren fought the application by flagging the ownership ties to the sitting president. The senator has announced a bill named the Ending Presidential Corruption in Banking Act.
Her January letter asked Trump to divest his interests in the company. Financial disclosures released in June showed he had received millions connected to World Liberty Financial, which fed the campaign rather than settling it. The group does not always move in a straight line: a $6.42B Crypto.com treasury was abandoned midway.
In the near term, the timeline rests on those preopening requirements. Until they are met the entity cannot operate, and the calendar stays in the regulator’s hands rather than the company’s.
Those requirements are not a formality either. They usually cover capital levels, governance appointments, audit arrangements and operational readiness, each of which can be reviewed and each of which can stall. A preliminary approval that never converts is a documented outcome in national bank chartering, not a theoretical one.
Further out, the charter reshuffles the stablecoin hierarchy. An issuer backed by a federal charter reassures corporate treasurers and regulated venues far more than an offshore one does. That is exactly the competitive edge the federal framework set out to build, even as Washington missed the stablecoin deadline it had set for itself.
One question no compliance file will settle remains. A stablecoin whose issuer is tied to the sitting president’s family carries political risk that shows up in no prudential ratio. A change of administration would reopen the case, whatever conditions are satisfied today.
Institutional users will price that risk before regulators rule on it. A treasurer choosing a settlement stablecoin looks at reserve quality first, then at how likely the issuer is to still hold its charter in three years. On the second question, USD1 answers with a political calendar rather than a balance sheet.
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