The Federal Reserve Board of Governors ( OCC ) has issued a conditional preliminary approval to OpenReserve Bank, allowing it to establish a nationwide full-licensing bank in Salt Lake City, Utah. This means that after meeting the capital and operational requirements, the company will be able to engage in traditional banking activities such as accepting deposits and issuing loans, rather than remaining solely at the custodial level.
OpenReserve is a fintech company focused on blockchain settlement scenarios, with investors including a16z, crypto, Coinbase Ventures, Jump Capital, and Wintermute Ventures. The company aims to replace the traditional banking batch processing methods that rely on ACH and wire transfers with an on-chain, 24/7 settlement model.
OCC comes with a clear capital threshold requirement
This approval is not an official license to commence operations, but rather a preliminary authorization with time limits and financial requirements. According to the decision of OCC, OpenReserve must raise at least $210 million in paid-in initial capital within 12 months, and still meet the requirements after deducting organizational costs.
At the same time, OpenReserve is required to maintain a leverage ratio of at least 12% in the first three years after opening. If financing is not completed on time, or if the business does not commence operations within the specified period, this preliminary approval will become invalid.
- Financing deadline: Completion by September 2027
- Opening deadline: Must open by March 2028
- Capital requirement: At least $210 million
Different from the paths taken by most in the crypto industry
OpenReserve chooses the path of a national bank with full licenses, rather than the more common national trust bank licenses in the cryptocurrency industry. The difference between the two is that trust bank licenses usually allow for custody and fiduciary services, but they are not permitted to accept deposits or issue loans.
Public information shows that companies such as Coinbase, Circle, Ripple, Paxos, and BitGo have previously mainly adopted a national trust license approach. If OpenReserve ultimately obtains formal approval, its business scope will be significantly broader.
Co-founder Diwakar Choubey stated that choosing a national bank as the partner was a deliberate decision. According to his plan, future services will cover tokenized deposits, fund management, overseas correspondent banking services, as well as a bank-as-a-service platform for institutional clients.
Stablecoin business will be placed in an independent subsidiary.
In addition to the main bank entity, OpenReserve also plans to establish a wholly-owned subsidiary for issuing, redeeming, and managing stablecoins denominated in US dollars and backed by reserve assets. However, this subsidiary has not yet submitted a separate application to OCC.
This means that the approval currently obtained by OpenReserve does not equate to the approval of stablecoin operations. If related businesses are to be pursued in the future, they will still need to comply with the requirements for stablecoin operations stipulated by the GENIUS Act, which came into effect in July last year in the United States.
Another company that received a similar conditional preliminary approval this week is the British fintech firm Revolut. The head of OCC, Jonathan Gould, has previously stated his hope to bring financial institutions that adopt new technologies under the federal regulatory framework.
However, there is no consensus on this path within American politics. Senator Elizabeth Warren criticized OCC in May of this year for continuously approving several crypto-related trust banks, stating that these institutions are more akin to “crypto banks” rather than traditional trust companies.
