A16z-backed OpenReserve approved as a full-service National Bank

OpenReserve Bank obtains preliminary conditional approval to establish a full-service National Bank in Salt Lake City

On September 2, OpenReserve Bank, which is supported by well-known venture capital institutions such as Andreessen Horowitz (a16z), received preliminary conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a full-service National Bank in Salt Lake City, Utah. The decision marks the official end of the review of OpenReserve's application, which lasted nearly five months and has been ongoing since it submitted its application on April 13.

Blockchain-native fintech start-up

OpenReserve Bank is a blockchain-native fintech start-up. a16z Crypto previously led a US$25 million seed round of financing, and other institutions such as Coinbase Ventures, Jump Capital and Wintermute Ventures also participated in the investment. The company positions itself as a "24/7 online" bank-replacing the batch processing channels traditional banks rely on such as ACH transfers and wire transfers through a blockchain-based continuous settlement system.

Strict capital requirements and time limits

This approval comes with specific financial indicators: OpenReserve must raise at least US$210 million in initial paid-in capital after deducting organizational costs, and maintain a Tier 1 leverage ratio of at least 12% for the first three years of operations. If the deadline is not met-that is, financing is completed within 12 months, or business is officially opened within 18 months-the approval will automatically expire.

Strategic considerations for selecting a national bank license

Diwakar Choubey, who led MoneyLion before co-founding OpenReserve with Richard Correia, described OpenReserve's choice of the more challenging full-service license path, which distinguishes it from the national trust licenses adopted by most "crypto banks", as a thoughtful strategic choice.

"We deliberately chose the path of National Bank," he said in a statement announcing the approval.

This choice distinguishes OpenReserve from most of its peers who hold crypto-related licenses. Coinbase, Circle, Ripple, Paxos and BitGo all adopt a national trust license route that allows them to engage in custody and trusteeship, but prohibits taking deposits and issuing loans. Once final approval is obtained, OpenReserve, which has a full-service National Bank license, will be able to conduct both businesses simultaneously.

Business Planning and stablecoin subsidiary

OpenReserve's core business plan includes tokenized deposits, treasury management (money management), foreign agent banking, and its "bank-as-a-service"(BaaS) platform for institutional customers. In addition, it plans to establish an independent, wholly-owned subsidiary to issue and redeem dollar-denominated, reserve-backed stablecoins. Currently, the subsidiary has not submitted an independent application to the OCC, and any stablecoin activity must comply with the GENIUS Act, a U.S. federal law that came into effect in July last year that specifically regulates stablecoin operations.

Industry Trends and Regulatory Disputes

OpenReserve was not the only institution to receive such a license this week. The OCC also granted British financial technology company Revolut preliminary conditional approval to nationally based Connecticut's National Bank. Jonathan Gould, the Comptroller of the Currency, sees the move as part of an effort to promote companies engaged in innovative technology into the federally supervised banking system.

However, this speed of advancement has not been unchallenged. Senator Elizabeth Warren pointed out in May that a series of OCC-approved crypto trust banks violated the National Bank Act and wrote that the companies "look like crypto banks, not trust companies." Despite this, the OCC approved the national trust license for the World Liberty stablecoin project related to the Trump family in August of the same year.

Currently, OpenReserve has until September 2027 to raise US$210 million and until March 2028 to officially open-if either deadline is missed, its preliminary approval status will automatically expire.