World Liberty Trust clears OCC's first hurdle and will replace BitGo as USD1 custodian

The pattern of the stablecoin custody market has changed: from independent crypto custodians to federally chartered trust banks

World Liberty Trust Co. Preliminary conditional approval has been obtained from the Office of the Comptroller of the Currency (OCC) to establish a national-level trust bank. If the entity fulfills all pre-opening requirements, it will become the exclusive issuer and custodian of the USD1 stablecoins under World Liberty Financial, open to institutional customers nationwide. The trust company also plans to provide digital asset custody services to institutions.

What has the trust charter changed?

This approval is preliminary and conditional, so the trust company still needs to complete operational and compliance steps before it can obtain final release. But the structure itself has revealed information: World Freedom Trust has no intention of becoming a federal insurance deposit institution, nor does it intend to become a bank under the Bank Holding Company Act, nor has it plans to apply for the Federal Reserve's main account.

This is important because it excludes some of the most controversial issues in the U.S. banking debate. Applying for a master account will attract scrutiny from the Federal Reserve and even lawmakers. By not being included in the framework of the Bank Holding Company Act and avoiding FDIC insurance, the company positions itself as a federally regulated trustee of assets rather than a deposit-taking bank.

Trust banks regulated by the OCC still need to meet capital, liquidity and risk management standards. For institutional clients, this may provide a different counterparty image than state-regulated trusts or private custodians. However, it does not provide deposit insurance, and stablecoin reserves held in trusts do not enjoy the same protection as bank deposits.

BitGo's fall: Market structure signals

BitGo has long been one of the more mature independent custodians in the cryptocurrency field. Now the exclusive role of USD1 has been lost and replaced by a specially established trust entity, indicating that large stablecin projects not only regard custody as a supplier relationship, but also regard it as a controlled link in the issuance system.

This shift is not unique to free finance in the world. In the area of tokenized assets and stablecoins, issuers have been looking for ways to reduce dependence on external custodians while meeting institutional compliance expectations. A recent tokenization summary shows that real-world assets on the chain have exceeded US$20 billion, and large financial institutions are gradually entering settlement and custody roles.

For BitGo, the relevant authorization will not disappear immediately. The transition period depends on whether World Freedom Trust can meet pre-opening conditions. However, the exclusive arrangement is difficult to replace, and the impact of being replaced as the designated issuer and custodian far exceeds a regular service replacement.

Regulatory Background

The OCC decision comes as the banking industry is engaged in a game over the shape of federal crypto legislation. As banking groups push to block the Senate crypto bill, trust charters have become an alternative way for crypto companies seeking federal legitimacy without a banking license.

However, this path is not without tension. The stablecoin policy remains pending in Washington, and regulators have not yet fully clarified how the National Trust Bank should treat stablecoin reserve assets, redemption obligations or operational risks. The lack of FDIC insurance may also limit the perception of such arrangements by some institutional customers, even if the OCC endorsement adds regulatory weight.

What is unclear is how quickly the trust company will complete its pre-opening work, and whether other large stablecoin projects will follow the same architecture. The OCC has previously shown willingness to issue charters to crypto-focused trust banks, but each approval comes with conditions that could delay the start of actual operations.

The underlying blockchain infrastructure is equally important. stablecoin issuance and institutional custody still rely on network reliability and developer support. Although major programmable chains continue to dominate activity, developer resources are still concentrated in a few networks, as reflected in the weekly rankings of developer activity.

For now, the preliminary approval has brought the World Freedom Trust one step closer to controlling a key link in the supply of USD1. The ultimate test is not the charter itself, but whether the trust can complete pre-opening requirements and actually start custody operations before the broader regulatory landscape changes again.