Payward Seeks OCC National Trust Charter for Crypto Custody

Payward, the parent company of crypto exchange Kraken, filed an application with the Office of the Comptroller of the Currency on Friday for a national trust company charter. The proposed Payward National Trust Company would offer federally regulated custody services for digital assets to institutional clients across the United States and serve as a qualified custodian where federal oversight is required.

The application builds on Payward’s existing regulated banking operations, including Kraken Financial, a Wyoming-chartered special purpose depository institution that holds a Federal Reserve master account. Payward said the national trust would provide custody services nationwide and would complement the capabilities of its Wyoming bank.

Arjun Sethi, Payward’s co-CEO, wrote in a company blog post that the firm believes regulation is the proper path for digital assets and that a national trust charter “provides the certainty institutions require and establishes the infrastructure to build the next generation of custody.” He added that Kraken Financial and the OCC application are complementary elements of Payward’s regulated banking strategy.

Federal regulators have recently shown greater willingness to grant federal charters and approvals to firms serving crypto customers. Earlier this year the OCC issued conditional approval to Coinbase, and last December the agency approved national trust or similar applications for Circle, Ripple, BitGo, Paxos Trust Company and Fidelity Digital Assets. Comptroller of the Currency Jonathan V. Gould wrote in December that new entrants “provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system.”

Payward has been active on the corporate front. The company agreed this week to acquire stablecoin firm Reap Technologies for $600 million and in March completed a $550 million purchase of derivatives exchange Bitnomial. Payward filed for an initial public offering in November after raising about $800 million at a valuation near $20 billion.

The OCC will review Payward’s charter application under its standard processes, assessing governance, capital levels, risk management and compliance programs required of federally regulated custodians. Payward did not provide a timetable for the OCC’s decision.