Stripe's Bridge Joins the Stablecoin Bank Charter Race

Stripe's Bridge Enters the Stablecoin Banking Arena

Stripe's Bridge, a stablecoin infrastructure provider, has thrown its hat into the ring, applying for a national trust bank charter from the Office of the Comptroller of the Currency (OCC).

This move signals a growing trend among stablecoin issuers seeking federal oversight and a standardized regulatory framework. Bridge's co-founder, Zack Abrams, stated on X that the charter would allow them to operate under the GENIUS Act.

Why a Bank Charter?

A national trust bank charter would enable Bridge to:

• Issue and redeem stablecoins directly.
• Custody stablecoins within a federally regulated environment.
• Avoid the complexities of navigating state-by-state money transmitter licenses.

Abrams believes this infrastructure could enable the tokenization of trillions of dollars.

The GENIUS Act and Stablecoin Regulation

The application comes after the passage of the Guiding and Establishing National Innovation for U. S. Stablecoins (GENIUS) Act. This act establishes a new charter category for stablecoin issuers and mandates:

• 100% reserves in cash or Treasuries.
• Monthly disclosures.
• Prioritized redemption rights for token holders.

This framework allows the OCC to directly supervise non-bank issuers, a key demand from fintech companies.

A Growing Trend

Bridge joins a growing list of companies seeking national trust licenses for their stablecoin operations. Circle (USDC), Ripple, Paxos, and Coinbase have also filed applications.

If approved, Bridge's license would position it as a pioneer in the space of stablecoin-focused national trust banks.

Industry Reaction

Astros, a representative for a decentralized exchange aggregator, sees Bridge's move as a major step towards federal recognition of digital dollar infrastructure, potentially fostering interoperability between on-chain liquidity and off-chain oversight. They believe a layered system of regulated institutions and decentralized protocols could benefit DeFi platforms by providing more regulatory clarity.

Key Takeaways

• Stripe's Bridge is seeking a national trust bank charter to issue and custody stablecoins.
• The GENIUS Act is driving a wave of applications for federal oversight of stablecoin issuers.
• The move signals growing regulatory clarity and potential for increased adoption of stablecoins in the U.S.