Yesterday digital asset custodian Anchorage was awarded a national trust bank charter by the Office of the Comptroller of the Currency (OCC). Just in the nick of time, as crypto-friendly Acting Comptroller Brian Brooks departs today.
Anchorage Trust is a subsidiary of the custody technology company, and it had an existing charter as a non-depository public trust company in South Dakota. The OCC converted this to a national trust bank charter and the firm is now referred to as the Anchorage Digital Bank National Association. The charter carries some conditions, including the parent company committing to provide sufficient liquidity.
The company was founded by Diogo Mónica and Nathan McCauley, who both have backgrounds in security engineering, having worked together at Square and Docker. In 2019 the company raised a total of $57 million, including from Visa. It’s also a member of Diem, formerly referred to as Facebook’s Libra.
The charter covers the existing activities, which include custody of digital assets, custody of fiat currency provided it sub-custodies with a deposit insured bank, on-chain governance services, staking services and settlement services. But it also was granted powers for broader fiduciary activities.
In its blog announcement, the company said that “having a national bank charter places Anchorage Digital Bank firmly on the same regulatory footing as other national banks in the country.” It already provides institutional custody services but can now provide sub-custody services to any traditional financial institution.
“As a federally chartered bank with fiduciary powers, Anchorage Digital Bank will unequivocally meet the definition of Qualified Custodian, giving institutions a straightforward way to meet their obligations under federal law.”
Paxos, which supports PayPal’s cryptocurrency activities, also applied for a national trust charter in December. It already has a trust license from the New York State Department of Financial Services (NYDFS). Around the same time, Bitpay also applied to the OCC.
More controversially, Figure Technologies applied for a national bank charter in November. In that case, it is a more specialized fintech application and not a trust charter. The Conference of State Bank Supervisors has sued the OCC. It claims the OCC doesn’t have the authority to grant a national banking license to Figure without FDIC insurance.