The US Office of the Comptroller of the Currency granted World Liberty Trust Company preliminary conditional approval on August 14. The proposed national trust bank could issue and redeem the USD1 stablecoin, manage its reserves and custody digital assets for institutional clients.

“Preliminary” is the operative word. World Liberty Trust cannot begin banking operations yet. The regulator retains the right to modify, suspend or withdraw its approval before opening, and the decision expires if the applicant misses its deadlines.

What the OCC actually approved

OCC Corporate Decision 1385 authorises the organisation of a limited-purpose national trust bank based in Bay Harbor Islands, Florida and wholly owned by WLTC Holdings LLC. It is not designed as a retail bank taking ordinary customer deposits.

Its plan covers three activities. The first is issuing and redeeming USD1 and maintaining its reserves in a non-fiduciary capacity. The second is fiduciary digital-asset custody. The third would let custody clients convert certain approved stablecoins into USD1, but only in connection with assets already under custody.

If it opens, World Liberty Trust would take over from BitGo Bank & Trust as USD1’s exclusive issuer and custodian. The transfer would include the token’s reserve assets and associated liabilities. For now, that is an approved plan, not a completed transfer.

Permission to organise, not permission to operate

The letter draws a clear line between the bank’s corporate existence and its authority to commence business. World Liberty Trust may adopt its articles, form its board and prepare its systems. It must use “In Organization” in official references until it opens.

Final authorisation depends on a pre-opening examination. The bank must notify the OCC at least 60 days before its intended opening date, demonstrate operational readiness and obtain final approval under US banking law.

Two deadlines frame that process: capital must be raised within 12 months of the August 14 decision, and the bank must open within 18 months. Otherwise, the approval expires. The OCC says it opposes extensions except in the most extenuating circumstances outside the applicant’s control.

Eleven requirements before the final green light

The conditions are substantive. World Liberty Trust must maintain at least $20 million of tier 1 capital. The greater of 50% of that capital or $10 million must be held in eligible liquid assets. It must hold another 180 days of operating expenses in eligible liquid assets, without double-counting the same pool.

The proposed bank must hire an independent external auditor. The OCC expects annual audits for at least the first three years of operations. It also needs anti-money-laundering and counter-terrorist-financing policies, sanctions controls, an information-security programme and a final systems architecture that receives supervisory non-objection.

Key executives and directors remain subject to prior review. During the first three years, any significant change to products, operations or risk limits requires 60 days’ notice and the OCC’s written non-objection.

That list defines the announcement’s real value: a regulatory route is open, but capital, governance, audit and compliance hurdles still stand between World Liberty and an operating bank.

Stablecoin rules remain a moving condition

The decision relies on the GENIUS Act, now codified in US law. It recognises that an uninsured national bank may become a federal qualified payment stablecoin issuer, subject to specific approval.

Title 12, Section 5903 requires at least one-to-one identifiable reserves, a public redemption policy, monthly reserve-composition disclosures and monthly examination by a registered accounting firm. Yet implementing rules are not all settled.

The OCC therefore requires World Liberty Trust to conform, cease or divest its stablecoin activities if they do not comply with the GENIUS Act, future implementing regulations or other applicable laws. A bank charter does not exempt USD1 from that framework; it would place the future issuer directly within it.

What this “bank” will not be

The label can mislead. World Liberty Trust does not plan to obtain federal deposit insurance or seek a Federal Reserve master account. It has also committed not to become a “bank” as defined by the Bank Holding Company Act.

USD1 itself would not become an insured deposit. The GENIUS Act excludes payment stablecoins from Federal Deposit Insurance Corporation coverage and prohibits issuers from presenting them as insured. Regulatory supervision strengthens oversight of the issuer; it does not turn a token into a guaranteed bank account.

For institutional customers, the distinction still matters. Issuance, reserves and custody would sit inside a supervised national entity with explicit capital and liquidity requirements. For a USD1 holder, that does not remove operational or redemption risk, or the need to inspect reserve reporting.

A charter does not erase the conflict question

The application is politically sensitive. The decision says the bank and World Liberty Financial LLC, which is linked to President Donald Trump’s family, share indirect common owners. Four commenters raised potential conflicts involving the president, his family, the Witkoff family and Emirati investors.

The OCC says career staff reviewed the application under its usual requirements and that approval decisions are delegated to them. It also says World Liberty Financial Inc. and its foreign investors are not parties to the bank application, while the bank will neither issue, custody nor deal in WLFI tokens.

That response explains the process; it does not close the political debate. The distinction matters: the decision proves a regulatory review occurred, not that every appearance of conflict has disappeared. CoinDesk led its August 14 coverage with that issue.

Why it matters now

The potential change is vertical. Today, USD1’s official transparency page publishes reports and a proof-of-reserves link, while the OCC still identifies BitGo as issuer and custodian. If every condition is met, World Liberty Trust could bring issuance, redemption, reserve management and institutional custody under one federal charter.

That concentration could make regulatory accountability simpler: one supervisor, one entity and one business plan. It also concentrates operational and governance risk. GatherHub’s inference is that control quality, audit independence and transparency around the reserve transfer will matter more than the word “bank” alone.

For a concise framework on what supports a stable token — and what reserves do not guarantee — see GatherHub’s course on Stablecoins.

What to watch next

The first verifiable signals will be the minimum capital raise and the pre-opening examination request submitted to the OCC. The next milestones are the final decision, the effective date of the transfer from BitGo and the first reserve reports issued under the new entity.

Two other items matter: the GENIUS Act’s implementing regulations and any significant change to the approved business plan. Until the OCC grants final approval, World Liberty Trust remains a bank in organisation — not USD1’s operating issuer.

Sources consulted