Key Takeaways:
Payward Inc., the parent company of cryptocurrency exchange Kraken, has applied to the U.S. Office of the Comptroller of the Currency for a national trust company charter, a move to establish a federally regulated custody business for digital assets.
"A national trust company provides the certainty institutions require and establishes the infrastructure to build the next generation of custody," said Arjun Sethi, co-chief executive officer of Payward and Kraken, in a company blog post. "Our long-held belief has always been that the right path forward for digital assets runs through robust, transparent regulation."
If approved, the charter would establish the Payward National Trust Company, which would provide custody and trust services for digital assets under federal oversight. The application complements Payward's existing Wyoming Special Purpose Depository Institution (SPDI) charter, known as Kraken Financial, which received a Federal Reserve master account in March. A national charter would allow the firm to operate across the U.S. without being subject to state-by-state licensing limitations.
The filing signals a broader industry push for regulatory clarity and institutional-grade infrastructure as crypto firms compete for a larger share of the financial market. By seeking a federal charter, Kraken follows competitors like Coinbase, Ripple, BitGo, and Paxos, which have already secured similar approvals from the OCC. This race for charters underscores the growing importance of regulated custody as a foundational layer for institutional investment in digital assets.
The OCC's willingness to grant charters to crypto-native firms has accelerated the integration of digital assets with the traditional banking system. For Kraken, establishing a national trust company is a strategic step to enhance its appeal to hedge funds, asset managers, and corporate treasuries that require federally regulated custodians.
The move also comes amid a period of significant expansion for Kraken. The firm recently agreed to acquire stablecoin firm Reap Technologies for $600 million and derivatives exchange Bitnomial for $550 million. With a valuation pegged at $20 billion in its last funding round, the company has been preparing for a potential initial public offering, and a federal trust charter would be a significant credential for public market investors.
Payward's leadership has framed the OCC application as part of a dual-pronged strategy, combining its state-level SPDI with a national trust.
"Kraken Financial and what we are building with the OCC are complementary pillars of Payward's regulated banking strategy aimed at advancing an efficient and accessible digitally native financial system," Sethi said.
While a state charter like Wyoming's SPDI offers a clear framework, a national charter from the OCC provides a more widely recognized and uniform regulatory status across the country. This could prove crucial as the firm scales its services and competes with both crypto-native companies and incumbent financial institutions entering the digital asset space. The path, however, is not without friction, as traditional banking groups have previously raised concerns about the OCC granting bank-like powers to fintech and crypto firms without imposing identical regulatory obligations.
This article is for informational purposes only and does not constitute investment advice.
