Payward Files for Federal Crypto Bank Charter With OCC
Kraken's parent company Payward has filed an application with the Office of the Comptroller of the Currency seeking a national trust company charter. The move would establish Payward as a federally regulated bank with direct access to the Federal Reserve's payment systems.
Key Takeaways
- 1## Charter Application Filed Payward, the holding company for cryptocurrency exchange Kraken, submitted a charter application to the OCC on Tuesday seeking approval to operate as a federally regulated national trust company.
- 2The filing represents Payward's bid to secure direct banking infrastructure and access to Federal Reserve payment rails, a status that would distinguish it from most other crypto exchanges that operate through third-party banking partners.
- 3## What Federal Charter Would Enable A national trust company charter grants Payward the legal authority to hold customer assets in custody, manage trusts, and maintain reserve accounts directly with the Fed.
- 4This eliminates the intermediary risk associated with third-party banking relationships and positions Payward to offer custody and settlement services that compete with traditional financial institutions.
- 5The OCC has granted similar charters to a limited number of crypto-related entities, though the regulator's approval process has been inconsistent and subject to political pressure.
Charter Application Filed
Payward, the holding company for cryptocurrency exchange Kraken, submitted a charter application to the OCC on Tuesday seeking approval to operate as a federally regulated national trust company. The filing represents Payward's bid to secure direct banking infrastructure and access to Federal Reserve payment rails, a status that would distinguish it from most other crypto exchanges that operate through third-party banking partners.
What Federal Charter Would Enable
A national trust company charter grants Payward the legal authority to hold customer assets in custody, manage trusts, and maintain reserve accounts directly with the Fed. This eliminates the intermediary risk associated with third-party banking relationships and positions Payward to offer custody and settlement services that compete with traditional financial institutions. The OCC has granted similar charters to a limited number of crypto-related entities, though the regulator's approval process has been inconsistent and subject to political pressure.
Path Forward and Competitive Context
Payward's application joins a modest pipeline of crypto firms pursuing federal banking status. The outcome will depend on OCC staff review of Payward's compliance infrastructure, capital adequacy, and operational readiness. Approval would represent a significant regulatory endorsement and could set a template for other major exchanges evaluating similar paths to direct banking relationships.
Why It Matters
For Traders
Federal charter approval could improve Kraken's operational stability and custody offerings, though the review process may take 12+ months and approval is not assured.
For Investors
A successful charter would reduce Payward's dependency on banking intermediaries and lower operational risk, materially improving the entity's long-term business model.
For Builders
Direct Fed access would allow Payward to offer settlement finality and custody guarantees that compete with traditional banks, potentially expanding the surface for DeFi integrations.
