Tough Questions for the OCC: Can Trump Influence Stablecoin Legislation?

On Thursday, Senator Warren, alongside Senators Chris Van Hollen and Ron Wyden, sent a formal letter to Jonathan Gould, the head of the Office of the Comptroller of the Currency (OCC). In their message, the senators expressed concern that the Trump family may be using crypto ventures to “line their own pockets.”

The Trump Family Enters the Stablecoin Arena

Over the past year, the Trump family has become increasingly involved in various crypto-related businesses, ranging from mining companies to token trading platforms. A standout example is the launch of the USD1 stablecoin in March 2024, issued through a platform called World Liberty Financial, which is directly connected to the Trump family.

This direct link raised red flags among lawmakers. The senators stressed that the success of USD1 is “deeply intertwined” with the Trump family’s financial well-being. They warned that the former president could leverage his political influence to shape the nation’s crypto policy to his own financial benefit.

“Launching a stablecoin tied to a sitting President who stands to profit from it financially presents an unprecedented conflict of interest and a serious threat to the integrity of our financial system.”

USD1 and a $2 Billion Investment: A Model for Corruption?

The letter also referenced a controversial $2 billion deal involving MGX, a firm based in the United Arab Emirates. According to the senators, MGX invested in the Binance exchange using USD1. They described the arrangement as a “staggering model for corruption,” claiming that it could yield the Trump family hundreds of millions of dollars in profit.

The senators pointed out that MGX is a foreign government-backed entity, and that Binance has pleaded guilty to violating U.S. laws related to anti-money laundering and economic sanctions. They also noted that the underlying code for USD1 was reportedly developed with assistance from Binance, further complicating the ethical landscape.

Key Demands for the OCC

In their letter, the senators posed several direct questions to Gould:

• Does Trump have the authority to remove you at will?

• If political pressure is applied, would you resign and present your reasons to Congress?

• Will the OCC investigate the competitors of World Liberty Financial?

The senators requested detailed responses by August 14.

USD1 Surpasses PayPal and Ripple Stablecoins

Despite the controversy, USD1 has gained significant traction in the stablecoin market. According to CoinGecko, its current market capitalization stands at $2.17 billion, placing it as the seventh-largest stablecoin globally. This puts it ahead of stablecoins issued by companies like PayPal and Ripple, a remarkable milestone for a coin with such recent origins.

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The post Strong Pushback from Democrats Over Trump Ties to Stablecoin Projects! appeared first on Coin Engineer.

Custody and Trading Services Authorized

In an official statement released on May 7, the OCC announced that national banks and federal savings associations may buy and sell crypto assets in custody at the direction of their clients. Additionally, services such as custody, recordkeeping, tax reporting, and other back-office operations can now be carried out either in-house or through external service providers.

Acting Comptroller Rodney Hood emphasized that banks operating under the OCC’s supervision may delegate custody responsibilities to sub-custodians, as long as appropriate third-party risk management practices are followed.

A Shift from Earlier Policies

Back in March, the OCC had already begun loosening restrictions by permitting banks to engage in crypto custody, certain stablecoin-related activities, and to participate in decentralized networks such as blockchain validators. These regulatory adjustments signaled a shift toward embracing the evolving financial ecosystem.

“More than 50 million Americans currently hold some form of cryptocurrency. This isn’t a passing trend—it’s a transformation in how financial services are delivered,” Hood stated, underscoring the growing relevance of digital assets in mainstream finance.

Industry Response: A Positive Step Forward

Katherine Kirkpatrick Bos, general counsel at StarkWare, described this move as a “notable pivot” in the OCC’s regulatory approach. She said it provides reassurance for banks looking to re-enter the crypto space without fearing existential compliance risks.

The crypto sector also welcomed the change. Faryar Shirzad, chief policy officer at a major crypto exchange, praised the OCC’s emphasis on regulatory clarity and adherence to well-established supervisory practices.

Changing Political Winds Favor Crypto

Since taking office in January, the Trump administration has adopted a more crypto-friendly stance. In April, the US Federal Reserve withdrew earlier guidance that discouraged banks from engaging in crypto and stablecoin activities.

Furthermore, on April 11, President Trump signed a resolution nullifying a prior rule that would have required decentralized finance (DeFi) protocols to report transactions to the Internal Revenue Service.

Together, these policy shifts highlight a more open and cooperative approach to crypto regulation in the US banking sector.

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On February 4, according to Bloomberg, Coinbase sent a letter to the Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC), requesting clarity on the status of banking services for crypto.  In the letter, Coinbase urged the OCC to withdraw an interpretive letter that “imposes a de facto application process for novel banking activities,” which it claims prevents banks from entering the crypto asset market.

Additionally, Coinbase is requesting confirmation from the Federal Reserve and the FDIC that state-chartered banks are authorized to provide and outsource crypto custody and execution services.

Coinbase Requests OCC to Remove Barriers for Crypto Market Access

Coinbase has asked the Office of the Comptroller of the Currency (OCC) to withdraw its interpretive letter that imposes a de facto application process for innovative banking activities, which Coinbase argues prevents banks from entering the crypto asset market. The exchange has also sought the intervention of the Federal Reserve and the FDIC to confirm that state-chartered banks have the authority to offer crypto custody and trading services.

According to Bloomberg, three law firms representing Coinbase have pointed out that current federal laws already allow banks to provide crypto services and collaborate with third-party service providers like Coinbase. Coinbase is now waiting for banking regulators to confirm this stance. The law firms involved include Arnold & Porter Kaye Scholer, Cleary Gottlieb Steen & Hamilton, and Wilmer Cutler Pickering Hale & Dorr.

Faryar Shirzad, Coinbase’s Chief Policy Officer, emphasized, “It is crucial for regulators to clarify that banks can work with third-party providers in offering trading and exchange services.”

Legal Struggles with FDIC: Digital Asset Firms Face Challenges

The role of US banks in serving the crypto industry has been a contentious issue. Some reports have suggested that the FDIC has instructed several US banks to halt their crypto-related activities. In June 2024, Coinbase filed lawsuits against the SEC and the FDIC, accusing them of orchestrating efforts to deprive digital asset firms of essential banking services.

In an ongoing legal battle, Coinbase’s Chief Legal Officer, Paul Grewal, stated in January 2025 that the FDIC deliberately omitted certain “pause letters” related to crypto in a Freedom of Information Act case. As President Donald Trump took office in January 2025, the community is now waiting for positive changes within the US crypto ecosystem. Coinbase, strengthening its ties with the Trump administration, hopes to foster new opportunities for crypto and economic freedom.

Coinbase’s Crypto Custody and Trading Support Marks Key Development

Coinbase’s move to reinforce its crypto custody and trading support is significant, especially as the platform provides custody services for Bitcoin exchange-traded funds (ETFs) that started trading in 2024. This step highlights Coinbase’s growing influence in supporting the broader crypto market in the US.

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