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, a move that would create a federally regulated digital-asset custody bank called Payward National Trust Company (PNTC). The filing lands in a regulatory environment that has warmed considerably toward crypto banking under the Trump administration, yet remains contested by traditional lenders who view these charters as an end-run around conventional bank oversight.
Kraken already operates Kraken Financial, a Wyoming special purpose depository institution (SPDI) chartered in 2020 that became the first digital-asset bank to obtain a Federal Reserve master account. The OCC application represents Payward’s attempt to build a “multi-charter” banking strategy, pairing state-level authority with federal oversight to serve institutional clients that require a federally regulated qualified custodian before they can park assets on a platform.
The Federal Charter Playbook for Crypto Custody
National trust charters have become the regulatory vehicle of choice for crypto-native firms looking to operate nationwide without assembling a mosaic of state money-transmitter licenses. The OCC began issuing interpretive letters in 2020 clarifying that national banks could provide custody services for digital assets, and a handful of crypto firms have since pursued trust charters as a path to institutional legitimacy.
Payward framed its application as the natural next step after years of building compliance infrastructure around Kraken Financial. The proposed PNTC would offer fiduciary custody and related services for digital assets, leaning on Payward’s existing risk-management, compliance, and custody systems while expanding access to clients who need federal-level regulatory cover.
“A national trust company provides the certainty institutions require and establishes the infrastructure to build the next generation of custody,” Payward and Kraken co-CEO Arjun Sethi said in a statement. The implication is clear: pension funds, endowments, and registered investment advisers often face internal policy constraints or external audit requirements that steer them toward federally regulated custodians. A state-chartered SPDI, even one with Fed access, may not check every box.
The timing is notable. Traditional banks have pushed back against the OCC’s crypto-friendly charter policy, with the Bank Policy Institute (representing JPMorgan, Goldman Sachs, and dozens of other large lenders) considering legal action against the agency over what it calls an uneven playing field. The banks argue that crypto trust companies enjoy lighter capital and liquidity requirements than full-service commercial banks while still gaining access to federal legitimacy. Whether that legal threat materializes could shape how the OCC handles Payward’s application.
A $2.65 Billion Acquisition Spree Sets the Stage
The OCC filing doesn’t exist in isolation. Payward has spent the past eighteen months assembling a regulated financial services conglomerate through aggressive M&A, apparently positioning the company for a potential initial public offering. The numbers add up quickly:
- NinjaTrader (2025): $1.5 billion for the retail futures trading platform, giving Kraken a foothold in traditional derivatives markets.
- Bitnomial (April 2026): Up to $550 million for the crypto derivatives exchange, which brought a full stack of Commodity Futures Trading Commission licenses covering brokerage, clearing, and exchange operations.
- Reap Technologies (this week): $600 million for the Hong Kong-based payments firm, extending Kraken’s reach into stablecoin-powered cross-border payments and card infrastructure across Asia.
The combined outlay, roughly $2.65 billion, signals a company betting that the next phase of crypto adoption will be driven by institutional capital and mainstream payments rails, not retail speculation on volatile tokens. Each acquisition adds a regulatory license or geographic footprint that Kraken lacked.
Bitnomial is particularly relevant to the OCC play. CFTC-regulated derivatives exchanges require robust custody arrangements for customer collateral, and having an in-house federally regulated trust company would allow Payward to internalize those custody flows rather than relying on third parties. The vertical integration logic is straightforward: control the exchange, control the clearing, control the custody, capture margin at every layer.
Wyoming SPDI Meets Federal Oversight: How the Pieces Fit
Kraken Financial’s Wyoming SPDI charter was a landmark when it arrived in 2020. Wyoming had crafted bespoke legislation for crypto banks, and Kraken became the first exchange to take advantage of it. The SPDI structure allowed Kraken Financial to custody Bitcoin, Ethereum, and other digital assets while also holding fiat deposits, all under state banking supervision.
The bigger prize came later: a Federal Reserve master account. That account gives Kraken Financial direct access to the U.S. payments system, including Fedwire, without needing to route transactions through a correspondent bank. For an exchange looking to move large dollar sums quickly and cheaply, master-account access is a competitive moat.
So why bother with an OCC charter on top of all that?
The answer lies in regulatory segmentation. A Wyoming SPDI is a state-chartered institution. While the Fed master account confers federal-level payments access, the underlying charter remains subject to Wyoming law and Wyoming regulators. Certain institutional investors, particularly those governed by ERISA rules or SEC custody requirements, have compliance frameworks that specifically reference federally regulated qualified custodians. A state charter, however innovative, may not satisfy those frameworks.
Sethi described the Wyoming SPDI and prospective OCC trust charter as “complementary pillars” of Payward’s banking strategy. The SPDI handles payments and fiat custody under state oversight with Fed access; the national trust company handles institutional digital-asset custody under federal oversight. Different clients, different regulatory boxes, same corporate umbrella.
This multi-charter approach mirrors strategies seen in traditional finance, where a single holding company might own a state-chartered bank, a nationally chartered trust company, a broker-dealer, and an investment adviser. Payward appears to be building that same architecture for digital assets.
Institutional Custody Becomes the Battleground
Crypto custody has quietly become one of the most contested areas of the industry. When spot Bitcoin ETFs launched in early 2024, every issuer had to designate a qualified custodian, and Coinbase Custody captured the lion’s share of those mandates. The concentration raised eyebrows: a single point of failure for billions of dollars in ETF assets.
Payward’s OCC application represents a direct challenge to that dominance. If PNTC wins approval, Kraken would be able to pitch itself as an alternative qualified custodian for ETF issuers, asset managers, and corporate treasuries holding Bitcoin on their balance sheets. Companies like MicroStrategy, which has accumulated over $15 billion in Bitcoin at cost, have relied on a mix of self-custody and third-party custodians. A federally chartered Kraken trust company would add another option to that short list.
The stakes extend beyond ETFs. Pension funds and endowments have been slower to enter crypto than hedge funds, partly because their investment policy statements often require assets to be held by federally regulated custodians. A Wyoming SPDI with a Fed master account is impressive, but it may not clear that bar. An OCC-chartered national trust company almost certainly would.
On the derivatives side, regulated futures and options exchanges must segregate customer funds with approved depositories. Payward’s Bitnomial acquisition gave it a full CFTC-regulated exchange, clearinghouse, and brokerage. Adding a federally chartered custody arm would let Payward custody its own customers’ collateral, capturing the spread between what it pays for custody services externally and what it could charge internally.
Regulatory Headwinds and the Bank Lobby’s Lawsuit Threat
Not everyone is cheering. The Bank Policy Institute, which represents 40 of America’s largest banks, has been vocal about its concerns with OCC crypto charters. The group argues that crypto trust companies benefit from a lighter regulatory touch than traditional banks while gaining access to the same federal imprimatur. In March, the BPI disclosed that it was weighing a lawsuit against the OCC to challenge the agency’s charter decisions.
The banks’ complaint has several threads. First, they argue that trust companies do not face the same capital and liquidity requirements as deposit-taking banks, creating an uneven competitive landscape. Second, they contend that the OCC has not adequately addressed how crypto custodians would handle runs or liquidity crises, given the volatile nature of digital assets. Third, they worry that federal legitimacy for crypto custody could accelerate deposit flight from traditional banks into crypto platforms.
Whether the BPI actually sues remains to be seen. The threat itself, however, introduces uncertainty into the approval timeline for Payward’s application. OCC charter reviews typically take twelve to eighteen months, and a pending legal challenge to the agency’s charter authority could complicate or delay the process.
The broader regulatory picture is more favorable than it was two years ago. The Trump administration has installed leadership at the OCC, SEC, and CFTC that is broadly sympathetic to crypto innovation, and Congress passed the GENIUS Act to provide a federal framework for stablecoin issuers. But sympathy at the policy level doesn’t eliminate procedural hurdles or industry opposition.
What Approval Would Mean for Kraken’s IPO Ambitions
Payward has not publicly confirmed an IPO timeline, but the company’s recent moves read like a pre-IPO checklist. Acquire regulated entities with defensible licenses. Build a multi-charter banking structure. Diversify revenue streams beyond spot trading fees. Establish a presence in Asia through payments infrastructure.
An OCC charter would add another credential to that list. Public-market investors, particularly institutional asset managers, tend to favor companies with clear regulatory status. A federally chartered trust company within the corporate structure would signal that Kraken is not just a crypto exchange but a regulated financial services firm capable of serving the same clients that use Fidelity or State Street for traditional asset custody.
The market context matters too. Crypto exchange valuations have been volatile, and Coinbase’s stock has swung wildly with Bitcoin’s price cycles. A diversified Kraken, with futures, derivatives clearing, stablecoin payments, and custody revenues, might command a more stable multiple than a pure-play spot exchange.
None of this is guaranteed. Charter applications can be denied or delayed. Acquisitions can face integration challenges. And the crypto market itself remains subject to cycles that have humbled plenty of well-capitalized firms. But Payward’s OCC filing is a concrete step toward a vision of Kraken as a full-stack regulated financial institution, not just an exchange with ambitions.
Sethi’s statement that the Wyoming SPDI and prospective OCC charter would serve as “complementary pillars” suggests the company sees this as a long-term infrastructure play. The next twelve to eighteen months will determine whether regulators, courts, and competitors agree.
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This article is for informational purposes only and should not be taken as financial advice. Crypto markets are volatile, do your own research.
