World Liberty bank charter approval is conditional, with key steps still ahead

World Liberty bank charter approval moved forward on Aug. 14 after the Office of the Comptroller of the Currency gave conditional preliminary approval to World Liberty Trust Company’s application for a national trust bank charter. For investors following stablecoins, the decision could eventually move key USD1 operations under federal supervision, though the company has not yet received a final charter.

World Liberty Trust is sponsored by World Liberty Financial, the crypto company that says a Trump-and-family-affiliated entity owns 38% of it, CNBC reported. Reuters reported that World Liberty filed its application in January.

What does World Liberty’s conditional bank charter approval mean?

A national trust bank can hold assets for customers, provide asset-servicing functions and settle payments. If the OCC grants final approval, World Liberty Trust could directly issue and redeem USD1, and hold the dollar assets that back the stablecoin, Reuters and The Wall Street Journal reported.

A stablecoin is a cryptocurrency designed to track a reference asset, in this case the U.S. dollar. USD1 is intended to maintain a value of $1. The Journal and Reuters put its market value at about $4 billion.

The proposed trust bank would not operate like a conventional commercial bank. Reuters reported that it would generally be unable to take deposits or make loans. That distinction matters: a trust-bank charter would expand World Liberty’s custody and payment capabilities rather than turn it into a full-service lender.

What still has to happen before World Liberty can open?

Conditional approval is not permission to begin operating as a federally chartered trust bank. Reuters reported that the OCC requires World Liberty Trust to maintain at least $20 million in capital, notify the regulator about major changes to its business plan and hire a qualified internal audit manager. The company must meet those and other requirements before final approval.

• Maintain at least $20 million in capital.
• Notify the OCC of major business-plan changes.
• Hire a qualified internal audit manager.

World Liberty currently uses BitGo for at least some stablecoin services, according to CNBC. Reuters reported that BitGo currently handles USD1 issuance and custody of the U.S.-dollar assets backing the token. A final charter would allow World Liberty to bring issuance, custody and reserve management into its own trust-bank structure under OCC oversight.

Zach Witkoff, World Liberty Financial’s chief executive and World Liberty Trust’s president and chairman, said the company welcomed continuing federal scrutiny. The OCC declined to comment on the approval, CNBC reported.

The decision has also drawn political criticism. Democrats, including Sen. Elizabeth Warren, have objected to the application because President Donald Trump and his family have a financial interest in the venture, CNBC and Politico reported. Reuters said the OCC stated that its comptroller and staff acted consistently with their legal and ethical obligations, that career staff reviewed the application, and that nonpolitical examiners would supervise the bank if it is approved.

This story draws on original reporting from CNBC.