Federal Reserve direct access to the payment system: Elevating the crypto industry to "bank" status

Odaily based on the authority of the agency

In December 2025, the U.S. Comptroller of the Currency (OCC) signed a historic decision. It authorized five digital asset companies—Ripple, Circle, Paxos, BitGo, and Fidelity Digital Assets—to obtain federal trust bank status. At first glance, this may seem like a simple administrative activity, but it signals a profound shift deep within the financial infrastructure.

Why is this not just a “bank license”?

First, clarity is needed: this permission is not a standard commercial bank license. Organizations with federal trust bank status cannot accept deposits, do not have FDIC insurance, and do not issue regular loans.

The real significance lies elsewhere: the right to be registered in the Federal Reserve’s payment system. This has been a benefit of the “two-tier banking system” existing in the U.S. since 1864. Banks operating under state or federal supervision are subject to different rules. A federal license means that an organization like JPMorgan, Bank of America, or others can have direct access to Fedwire, CHIPS, and other Federal Reserve payment networks.

Moving away from the “correspondent bank” intermediary model

By the end of 2024, stablecoin issuers like Circle and Ripple relied on intermediary banks for dollar transfers. Each dollar transaction passed through multiple bank layers, incurring fees and delays each time. This “correspondent banking model” created three main problems.

First, risk of disruption. When SVB collapsed at the end of 2023, Circle’s $3.3 billion USDC reserve temporarily remained in bank intermediaries. If a partner bank ceases operations, the crypto company’s dollar channel can be shut down in seconds.

Second, costs are unclear. In stablecoin competition, each small fee adds up, but cumulatively it becomes significant. Eliminating intermediary bank fees in high-frequency, high-volume sectors can save 30-50% of operational costs annually. For Circle’s $80 billion USDC holdings, this is not just hundreds of millions in savings but a fundamental change to the core business model.

Third, continuity issues in settlement cycles. Traditional banks use T+1 or T+2 settlement, during which funds are tied up in liquidity. For cross-border payments, this risk increases.

The federal trust bank status changes all this. Direct connection to Fedwire allows Circle, Ripple, and others to perform continuous, real-time, irrevocable settlements in practice.

The redefinition of the stablecoin concept

The combination of “100% full reserve + federal oversight + trusted representation” radically separates USDC or RLUSD from offshore stablecoin products. The issuer’s main assets are now very briefly segregated from these OCC-regulated entities, making them independent of technical risks or the movement of funds from the parent company.

The practical impact is significant in the payment sector. Ripple’s On Demand Liquidity (ODL) service, which relies on temporary credit lines, becomes unnecessary once connected to Fedwire. The exchange between fiat and digital assets becomes similarly seamless.

Trump era and the signing of the GENIUS Act

This change is not about technology but about the realignment of the political-regulatory environment. During the Biden administration, the crypto industry faced “debanking,” being pushed outside the banking system. Regulators reasoned: it’s easier to isolate the system than to regulate risk.

After Trump’s election, the logic changed fundamentally. The U.S. began to position itself as a “global crypto innovation hub,” recognizing stablecoins as a means of expanding the dollar system.

In July 2025, the “GENIUS Act” was signed, providing clear legal status for stablecoins and their issuers at the federal level. The law mandates 100% full backing, priority payment rights, and strict AML requirements. OCC licensing under this law is a logical outcome of these regulations.

Traditional banks are fighting back

This shift is not a victory for Wall Street. The Bank Policy Institute (JPMorgan, Bank of America, Citibank, representing their interests, issued sharp criticism. Main accusations include: regulatory arbitrage )crypto companies “continued payment bank activities through trust licenses, but their holding companies were removed from consolidated supervision by the Federal Reserve”(; unfair competition )by squeezing traditional banks through technology monopolies(; systemic risk )stablecoins without FDIC insurance could quickly disrupt liquidity pools(.

The most significant “barrier” — if the Federal Reserve does not open a main account, all Fedwire capabilities remain in effect. Custodia Bank in Wyoming has OCC license approval, but the Federal Reserve refused to open a main account. This ongoing standoff remains a new battleground.

What to expect in the future

OCC authorization is not the end of the debate; it is just the beginning. State regulators )NYDFS(, enforcement rules, capital requirements, cybersecurity standards—all will become central topics in upcoming political discussions. Balancing traditional finance and innovation has become the primary task for U.S. regulators.