Modern Treasury, a payments infrastructure company, is seeking a federal trust bank charter to offer digital asset custody, including stablecoin custody, through a limited-purpose national trust bank. The charter would allow the company to provide custody and related fiat services under federal oversight.
What the charter would allow
A limited-purpose national trust bank charter authorizes the institution to perform fiduciary activities such as custody, but not to take deposits or make loans. For Modern Treasury, this would mean the ability to hold stablecoin reserves and provide related services without needing a state-by-state licensing patchwork.
Stablecoin custody involves safeguarding the assets that back a stablecoin, typically cash and short-term government securities. A trust bank structure would put those assets under a federally regulated entity, which could appeal to stablecoin issuers looking for a single, nationally recognized custodian.
Why a trust bank
The payments company already provides infrastructure for moving money between bank accounts. Adding custody would let it handle the digital asset side of transactions as well, potentially offering a more integrated service for clients that deal in both traditional fiat and stablecoins.
Federal trust charters have become a sought-after path for crypto firms seeking regulatory clarity. The Office of the Comptroller of the Currency, which grants these charters, has considered applications from several digital asset companies in recent years. Approval would give Modern Treasury a federal stamp of approval, though it would still need to meet capital, compliance, and risk management requirements.
Not all applications succeed. The OCC has taken a cautious approach, and the process can take months or longer. Modern Treasury's application is now in the hands of federal regulators, who will review its business plan, management team, and financial resources.
The stablecoin custody race
Stablecoin custody is becoming a crowded field. Banks, trust companies, and specialized custodians are all vying to hold reserves for the largest stablecoins, which collectively manage tens of billions of dollars. A federal trust charter could give Modern Treasury a competitive edge by simplifying cross-state operations.
For stablecoin issuers, the choice of custodian matters. They need an institution that can handle large volumes, provide transparency, and satisfy auditors and regulators. A trust bank with a national charter checks many of those boxes, but it also comes with strict oversight.
Modern Treasury hasn't disclosed a timeline for the application or which specific stablecoins it would custody. The company's existing payments infrastructure already connects to major banks, so adding a trust bank would extend its reach into the digital asset space.
What happens next
The application will be reviewed by the OCC. If approved, Modern Treasury would join a small group of federally chartered trust banks focused on digital assets. If rejected, the company could reapply or pursue a state trust charter instead.
For now, the application is pending. There's no public schedule for a decision, and the OCC doesn't comment on pending applications. Modern Treasury's move signals that payments companies see stablecoin custody as a natural extension of their business — and that federal regulators remain the gatekeepers.
