Modern Treasury asks the OCC for a trust bank to hold its payment clients' stablecoins

"We have now fully integrated stablecoins to our payments platform. Pursuing this charter will add direct federally supervised digital asset custody and related services to the infrastructure our customers already use," Marcus said, after calling stablecoins "foundational economic infrastructure for the future" ^[5]. The company did not say who holds its customers' stablecoins today. The reports describe a payments-infrastructure company, as Crypto Briefing puts it, folding stablecoins into an existing product and wanting the custody leg under its own federal supervision ^[11].

The terms are narrower than the charter requires. A national trust charter already rules out deposit-taking, lending and FDIC insurance ^[12], and Modern Treasury has added a promise not to issue a stablecoin ^[3]. It is choosing not to carry a loan book or put a token of its own into circulation. Holding and moving other people's money, in both forms, is the whole remit ^[1][2]. The payments business that has moved more than $600 billion ^[6] stays in the software and payment service provider company, kept apart from what the release calls a "separate, limited-purpose banking entity" offering only OCC-permitted services ^[7].

Counting both reports, eight other firms are named as having sought OCC trust charters, and four of them hold an approval, two final and two conditional ^[16]. Modern Treasury filed about 12 months after buying Beam ^[17]. Nothing goes live until the OCC signs off ^[8].

The community bankers want that sign-off to be harder to get ^[13]. "Congress did not create the national trust charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter," ICBA President and CEO Rebeca Romero Rainey said ^[14]. The OCC declined to comment on the litigation ^[15].

The OCC may approve on the path it already took for Circle and BitGo ^[10]. Or the ICBA suit slows the charter for everyone in line ^[13]. Or approval arrives and clients use the trust bank mainly for stablecoins and the dollars needed to settle them, while larger operating cash stays at insured deposit banks ^[2][12]. I think that last outcome is the likeliest commercial result, even if the first is the likeliest regulatory one. The counter-case is that one supervised counterparty for both rails is worth enough to a treasurer that fiat balances follow the payment flows into custody ^[2]. I would be wrong if, a year after any approval, Modern Treasury reports fiat in custody that matches or exceeds the stablecoins it holds.