ICBA asks OCC to deny Sony Bank stablecoin trust charter

In a letter submitted last week, the trade association called the filing “an impermissible reinterpretation” of federal law that “could foreseeably lead to consumer confusion and consumer harm in the event of insolvency.”

Sony Bank filed in October to establish Connectia Trust, which would issue U.S. dollar-pegged stablecoins, hold reserve assets backing those tokens, and provide digital asset custody services.

The ICBA contended that Connectia’s stablecoin would share key features of bank deposits, including use for electronic transfers, point-of-sale payments, and one-to-one redemption for dollars, while avoiding federal deposit insurance and Community Reinvestment Act requirements. “This approach appears designed by Sony Bank to receive the benefits of a U.S. bank charter without becoming subject to the full scope of U.S. bank regulations,” wrote Mickey Marshall, ICBA vice president and regulatory counsel.

The group also questioned whether Connectia could rely on Bank Holding Company Act exemptions available only to firms operating “solely in a trust or fiduciary capacity.” The letter noted that a trust bank can lose that status if it permits withdrawals “by check or similar means for payment to third parties.” It pointed to Connectia’s plan to engage in the “business of banking and activities incidental to the business of banking permissible for a national bank,” which the ICBA argued sets the stage for debit cards that could conflict with those limits.

Governance issues were raised as well. The association cited Sony Group Corporation’s roughly 20% stake in Sony Financial Group, Connectia’s parent, and said the relationship warrants further review of whether a controlling influence exists that could trigger bank holding company regulation.

Operational risk featured prominently. The ICBA noted the OCC has not resolved an uninsured national bank since 1933 and questioned the agency’s readiness to handle a failure involving crypto infrastructure, warning that “a single failure in key reassembly or system migration could result in permanent loss of access to billions in customer assets.”

Industry voices disputed the ICBA’s objections. Kadan Stadelmann, chief technology officer at Komodo Platform, called the group’s claims “overstated and driven by big-bank interests.” In his view, “The risks to consumers of stablecoins are being exaggerated in the name of protectionism by big banks of their dominance in western finance.” He urged regulators to support innovation while enforcing “sensible rules like the GENIUS Act,” asserting that stablecoins can reach unbanked populations and reduce bank-run risks through on-chain transparency.