Kraken Parent Payward Files for OCC Trust Charter to Expand Crypto Custody

Kraken’s parent company is pushing for a federal trust charter in the U.S., a move that could give it a stronger hand in regulated crypto custody while rattling the old banking club.

• Payward filed for an OCC National Trust Company charter
• The goal is a federally regulated custody business for digital assets
• The proposed entity would be Payward National Trust Company
• Kraken says the focus is on the right framework, not a vanity race
• Banking groups warn the OCC may be stretching its authority

Payward, the parent company of Kraken, has applied to the U.S. Office of the Comptroller of the Currency for a National Trust Company charter. If approved, the new entity, Payward National Trust Company or PNTC, would operate a federally regulated custody business under OCC oversight, giving Kraken a formalized route to hold digital assets for institutional clients and individual customers who want regulated storage.

That may sound like a paperwork-heavy snooze-fest to outsiders, but it’s actually one of the biggest bottlenecks in crypto adoption. Custody means securely holding customer assets. A qualified custodian is a regulated entity that institutions can use for that job. Pension funds, asset managers, corporates, and serious counterparties usually don’t want to self-custody large amounts of bitcoin or other digital assets, because they need controls, governance, auditability, and a legal framework that doesn’t look like a teenager managing a seed phrase on a sticky note.

Put simply, custody is the unglamorous plumbing that makes institutional adoption possible. Without it, crypto remains a market full of big promises and awkward risk management. With it, the industry gets closer to being usable by the people who actually move serious capital.

Payward says the proposed trust company would build on its existing infrastructure, risk management systems, compliance programs, and regulated affiliates. Kraken co-CEO Arjun Sethi framed the filing as part of building the “next generation of custody,” while making clear that the point is not to sprint to the front of the queue and pose for a photo op.

“A national trust company charter would allow Payward to set up a federally regulated custody business under OCC oversight.”

“The purpose is to broaden access for institutional clients that require a federally regulated qualified custodian.”

“The kind of certainty institutions look for.”

“The infrastructure required for the next generation of custody.”

“The effort is not about being first, but about getting the framework right.”

That last line is doing a lot of work. It reflects the wider shift happening across serious crypto firms: less cowboy theater, more compliance, more boring controls, more “please let us into the adult table.” After the wreckage of collapsed exchanges and the parade of half-baked operations that made the industry look like it was built in a garage between energy drinks, a lot of firms are trying to rebrand themselves as actual infrastructure.

Kraken is not doing this in isolation either. The company has already been linked to Kraken Financial, a Wyoming SPDI — a Special Purpose Depository Institution, which is a narrow Wyoming bank charter built for limited banking functions — and a Federal Reserve master account. That master account matters because it can open access to core payment and settlement rails, the kind of thing that can turn a crypto business from “parallel system” into something much closer to financial plumbing.

That broader strategy makes sense. If Kraken wants to serve institutions instead of just retail traders chasing candles and chaos, it needs a framework that looks credible under a microscope. Institutions care about counterparties, regulatory status, and whether the custodian will still exist after the next market meltdown. They don’t need hype. They need assurance. Boring, expensive, heavily documented assurance.

And that is why this filing lands in the middle of a much bigger regulatory fight.

The OCC has already conditionally approved national trust bank charters for several crypto firms, including Circle, Ripple, BitGo, Fidelity Digital Assets, Paxos, and reportedly Coinbase, which received conditional approval last month for Coinbase National Trust Company. The pattern is obvious: regulators are inching toward formalizing crypto custody inside the U.S. banking system, one approval at a time.

Supporters call that common sense. If digital assets are going to be held by institutions, there needs to be a regulated custody path. Bitcoin, stablecoins, and tokenized assets don’t disappear just because regulators pretend they’re still playing whack-a-mole with 2018-era fear. Institutional money wants clean rules, not vague nods and shrug-based compliance.

There’s a solid argument there. Crypto custody has matured into a real business line, and the market is moving toward firms that can prove they can safeguard assets properly. That’s especially true for bitcoin, where long-term holders, funds, and corporates increasingly want custody solutions that reduce operational risk without forcing them to give up exposure to the asset itself.

But the critics aren’t just being cranky for sport.

Banking lobby groups argue the OCC is stretching the original purpose of the national trust charter and lowering the bar for crypto firms. Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, warned that these approvals could endanger consumers and create institutions the OCC may struggle to supervise. She also argued that stablecoin operators may be getting access to the federal banking system without having to carry the same capital and regulatory burdens as traditional banks.

Critics warn the OCC may be “stretching the definition and historical purpose” of the national trust bank charter.

Rebeca Romero Rainey warned the approvals could “endanger consumers.”

That concern is not entirely bullshit. Traditional banks are right to ask whether crypto firms are being given a softer route into the system than the one they themselves had to crawl through. If one group gets full access to core financial infrastructure without matching capital, supervision, and risk controls, then “innovation” starts to look a lot like regulatory arbitrage with a cooler logo.

At the same time, banking lobbyists are not exactly neutral guardians of public safety. Some of the outrage is clearly about competition. Crypto custody could siphon business from incumbent banks and trust companies that are happy to keep the gates shut when the newcomers are knocking. In plain English: some of this is about consumer protection, and some of it is about protecting turf.

The real issue is how the OCC draws the line. A national trust charter is not the same as a full bank charter, but it can still give a crypto company a legitimate, federally supervised way to provide custody and trust services. That may be exactly what the market needs. Or it may be the start of a messy patchwork where crypto firms get bank-like privileges without bank-like obligations. Both outcomes are plausible. That’s the annoying part about regulation: the people writing the rules often act as if their lane markers were handed down from Mount Olympus.

For Kraken, the strategic upside is clear. A federally regulated custody business could improve trust with institutions, support new products, and strengthen its position as a serious infrastructure provider rather than just another exchange trying to win a liquidity race. It would also fit neatly with the broader trend of crypto firms chasing more traditional financial status, especially after the industry learned the hard way that “move fast and break things” is a terrible motto when those things are customer funds.

Still, this is bigger than Kraken’s balance sheet or market positioning. It speaks to a broader question facing U.S. crypto regulation: should digital asset firms be integrated into the banking system through tailored charters and supervised trust structures, or should that door stay narrow until regulators are convinced the industry has matured enough to deserve it?

Right now, the answer appears to be a cautious yes, but with a lot of grumbling, paperwork, and side-eye from the old guard. And that may be the most realistic path forward. The crypto industry wants legitimacy. Regulators want control. Banks want to protect their moat. Somewhere in that tug-of-war, the next generation of bitcoin and digital asset custody is getting built.

• What did Payward file for?
  A National Trust Company charter with the OCC to create a federally regulated custody business for digital assets.
• Why does Kraken want this charter?
  To expand regulated crypto custody services for institutional clients and other customers who want a qualified custodian.
• What would the new entity be called?
  Payward National Trust Company, or PNTC.
• Why is custody so important in crypto?
  Because institutions need secure, regulated storage for digital assets instead of self-custody or loosely supervised setups.
• How does this fit Kraken’s broader strategy?
  It complements Kraken Financial, the Wyoming SPDI, and the push for a Federal Reserve master account.
• Which other crypto firms have similar approvals?
  Circle, Ripple, BitGo, Fidelity Digital Assets, Paxos, and reportedly Coinbase.
• Why are banking groups pushing back?
  They argue the OCC may be stretching its authority and allowing crypto firms into the system without bank-level standards.
• What does this mean for bitcoin and crypto regulation in the U.S.?
  It suggests regulators are opening the door to more formal crypto integration, but the fight over how wide that door should open is far from over.