Payward applies for OCC charter as Payward seeks national trust status in United States for Kraken custody expansion

Payward, the parent company behind crypto exchange Kraken, has taken a major step toward deeper integration with the traditional financial system by submitting an application to the U.S. Office of the Comptroller of the Currency (OCC) for a National Trust Company charter.

The move signals a clear ambition: bring crypto custody services under full federal oversight in the United States.

This development arrives at a time when digital assets are increasingly being pulled into regulated financial frameworks, especially as institutions demand safer, compliant custody solutions before committing large capital to crypto markets.

Why Payward Wants a National Trust Company Charter

At the center of the application is the creation of a federally regulated custody entity called Payward National Trust Company (PNTC), if approved by the OCC.

The goal is straightforward but significant—operate a custody business that meets strict U.S. federal standards.

For institutional investors, custody is everything.

Large funds, asset managers, and corporate treasuries typically require a “qualified custodian” that is regulated at the federal level.

Payward is positioning itself to meet that requirement directly, rather than relying on third-party banking partners.

The company says this structure would allow it to offer secure digital asset custody services not only to institutions but also to individual users seeking regulated storage solutions.

Kraken’s Broader Push Into Regulated Finance

Payward is not starting from scratch. Its ecosystem already includes regulated operations such as Kraken Financial, which operates under a Wyoming Special Purpose Depository Institution (SPDI) framework.

The company also has experience interacting with federal banking infrastructure, including access to a Federal Reserve master account through its regulated entity in Wyoming.

These foundations are now being extended into a broader custody strategy.

Arjun Sethi, Co-CEO of Payward and Kraken, has repeatedly argued that crypto growth depends on regulatory clarity.

In his view, the national trust model offers the type of structure institutions trust because it defines rules clearly rather than leaving custody in legal grey zones.

What Approval Would Change for the Crypto Industry

If the OCC grants approval, Payward would be able to operate a federally supervised trust entity capable of providing custody services at scale.

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That could place it alongside a growing list of crypto firms moving toward federal charters, including Circle, Ripple, BitGo, Fidelity Digital Assets, Paxos, and Coinbase’s trust entity.

This trend suggests a broader shift: crypto firms are no longer just competing with each other, but also attempting to plug directly into the U.S. financial regulatory system.

The long-term implication is that digital asset custody could start resembling traditional banking custody services, but with blockchain infrastructure underneath.

Regulatory Pushback Still Shapes the Debate

Not everyone is convinced this expansion is appropriate.

Banking industry groups have raised concerns that the OCC is stretching the traditional meaning of a national trust charter by granting approvals to crypto firms.

Critics argue that allowing stablecoin and crypto custody providers into federally regulated banking frameworks could create uneven regulatory standards compared to traditional banks, especially in areas like capital requirements and risk management.

Leaders such as Rebeca Romero Rainey of the Independent Community Bankers of America have warned that these approvals could introduce systemic risks and challenge the OCC’s ability to supervise rapidly evolving crypto institutions.

Market Context and Industry Pressure

The timing of Payward’s application also reflects broader conditions in the crypto sector.

Total crypto market capitalization remains in the trillions, but volatility and regulatory uncertainty continue to shape investor behavior.

Institutional adoption has been growing, but slowly, with custody infrastructure often seen as the final barrier before large-scale participation becomes routine.

Impact and Consequences

If successful, Payward’s OCC charter could significantly strengthen Kraken’s position in the institutional crypto market.

It would give the company a federally recognized custody structure, potentially increasing trust among pension funds, hedge funds, and corporate clients.

For the wider industry, it could accelerate the convergence between crypto platforms and traditional banking systems.

That might bring more stability and legitimacy, but also tighter oversight and compliance burdens.

On the flip side, rejection or delays from regulators could slow institutional adoption and reinforce the fragmented custody landscape that currently exists.

What’s Next?

The OCC review process will determine whether Payward can officially establish its national trust company.

That process can take time, involving regulatory scrutiny of governance, risk controls, capital structure, and compliance systems.

In parallel, other crypto firms pursuing similar charters will be watching closely.

A decision in Payward’s favor would likely encourage more applications, while resistance could cool enthusiasm for federal trust banking pathways.

Either way, the outcome will shape how crypto custody evolves in the United States over the next phase of industry development.

Summary

Payward’s application for a National Trust Company charter represents a strategic push by Kraken to deepen its role in regulated digital asset custody.

The plan builds on existing infrastructure like Kraken Financial and reflects a broader industry trend toward federal oversight.

While supporters see it as a step toward institutional adoption and market maturity, critics worry it may blur the lines between crypto firms and traditional banks without equal regulatory safeguards.

Bulleted Takeaways

• Payward applied for a National Trust Company charter through the OCC
• Proposed entity: Payward National Trust Company (PNTC)
• Goal is to expand federally regulated crypto custody services
• Builds on existing infrastructure like Kraken Financial
• Part of a broader push toward institutional crypto adoption
• Similar approvals have been granted to firms like Circle, Ripple, BitGo, Paxos, Fidelity, and Coinbase entities
• Banking groups argue the OCC may be overextending trust charter rules
• Approval could accelerate institutional crypto adoption; rejection could slow it down
• Final decision depends on OCC regulatory review of compliance and risk systems