OCC Grants Preliminary Bank Charter to World Liberty Trust for USD1 Custody

Woofun AI reports that the Office of the Comptroller of the Currency (OCC) issued preliminary conditional approval for the establishment of World Liberty Trust Company, National Association, in Bay Harbor Islands, Florida. This regulatory milestone permits the organizers to formally constitute the legal entity and initiate preparatory operations, though no banking activities may commence until preopening requirements are satisfied, an OCC examination is passed, and final approval is secured. The approval specifically targets the infrastructure for the USD1 stablecoin, marking a significant step toward federal supervision of its custody and issuance mechanisms.

The timeline for operational transition is strictly defined, with the legal entity formation authorized as of August 14. Until the trust company receives final approval and completes the OCC examination, BitGo Bank & Trust continues to serve as the exclusive issuer and custodian of USD1. The proposed structure envisions a seamless transfer of responsibilities, where World Liberty Trust Company will eventually assume control over the stablecoin's reserve assets and associated liabilities. This transition is contingent upon meeting rigorous preopening standards, ensuring that the shift from BitGo to the new national trust bank occurs only after comprehensive regulatory validation.

Upon finalization, the scope of services will expand to include the acquisition of USD1's reserve assets and liabilities from BitGo, with the conversion service applying exclusively to assets already held in custody. Crucially, this arrangement does not transform the trust company into a general-purpose crypto exchange; rather, it focuses on secure custody and stablecoin management. The OCC letter specifies that USD1 issuance and redemption are expected to be fee-free at launch, reinforcing the asset's utility as a payment instrument. This limited service scope ensures that the trust company remains distinct from broader cryptocurrency trading platforms, maintaining a clear boundary between stablecoin custody and speculative asset exchange.

Structurally, the proposed bank is wholly owned by WLTC Holdings LLC, with World Liberty Financial LLC sharing indirect common owners, a relationship acknowledged by the OCC. The regulator separately approved the planned transfer of USD1 reserves and liabilities under an exemption available to newly formed banks, facilitating the consolidation of issuance, reserve management, and custody within a single federally supervised institution. This corporate architecture allows for integrated oversight while adhering to the specific exemptions granted to new entrants in the national trust bank sector. The alignment of ownership and operational control aims to streamline governance while maintaining the regulatory safeguards required for federal supervision.

World Liberty Trust Company is classified as a limited-purpose national trust bank, explicitly distinguishing it from a conventional bank that accepts federally insured deposits. The company has committed not to become a bank under the Bank Holding Company Act and has no intention of becoming an insured depository institution or seeking a Federal Reserve master account. Consequently, USD1 will remain a payment stablecoin rather than a bank deposit, meaning its holders will not receive FDIC protection solely because the issuer operates under a national trust charter. This classification clarifies the regulatory boundary, ensuring that the stablecoin's status as a digital asset is preserved without the implications of traditional banking insurance.

Woofun AI data shows that the approval covers USD1 and digital-asset custody, explicitly excluding World Liberty Financial's governance token from the charter's scope. This boundary was central to several public objections, with the OCC receiving seven comments from four commenters. Concerns raised included issues related to WLFI purchases, foreign investment, and potential conflicts involving President Donald Trump, his family, and members of the Witkoff family. The regulator maintained that career OCC staff reviewed the application under established procedures, treating questions about WLFI purchases as outside the charter decision since the proposed bank will not handle the token. Neither World Liberty Financial, Inc. nor its foreign investors were direct parties to the application, further isolating the governance token from the banking charter's regulatory purview.

To mitigate conflicts of interest, the approval includes passivity commitments from three indirect investors: DT Marks SC LLC, StringZ Holdings RSC (DE) LLC, and AMGUS LLC. These entities agreed not to seek board representation, access material nonpublic information, or influence the bank's pricing, investment, personnel, and operating decisions. If an investor holds at least 10% of a voting class, voting rights above 9.9% must be passed to management under a proportional proxy arrangement. Eric F. Trump signed one of these commitments as president of DT Marks, formalizing the separation between financial ownership and operational control. These restrictions ensure that while economic interests remain, direct influence over the bank's daily operations is curtailed, preserving the integrity of the federally supervised institution.

Financially, World Liberty Trust Company must maintain at least $20 million in tier 1 capital, with the greater of 50% of that capital or $10 million held in eligible liquid assets.

Additionally, the bank must maintain a liquidity buffer covering 180 days of operating expenses, without counting the same assets twice. These funds support the trust company itself and are separate from the assets backing USD1, clarifying that the $20 million figure does not represent the size of the stablecoin's reserve pool. The capital and liquidity conditions will remain in effect during the bank's first three years, with significant changes to products, services, or risk limits requiring 60 days' notice and written non-objection from the OCC. Compliance with the GENIUS Act and future implementing rules is mandatory, and the OCC retains the authority to alter, stop, or divest any stablecoin activity that fails to meet these requirements.

The organizers face strict deadlines, with the required capital to be raised within 12 months of the August 14 decision, setting an August 2027 deadline. The bank must open within 18 months, or by February 2028, unless the OCC grants an extension under exceptional circumstances. At least 60 days before the intended opening, the organizers must confirm that conditions have been met and request a preopening examination. The bank also needs an independent auditor, security and information-system plans, and operating controls covering the Bank Secrecy Act, anti-money-laundering requirements, and sanctions compliance. The OCC can modify, suspend, or withdraw its approval if the information supporting the decision changes materially. Until final approval is granted, BitGo remains the issuer and custodian of USD1, with the OCC decision providing a path to take over that infrastructure rather than launching an already open bank.