Kraken's parent company Payward has filed for a national trust charter with the Office of the Comptroller of the Currency, joining Ripple and Coinbase in pursuing formal banking infrastructure. The application targets establishment of Payward National Trust Company, or PNTC.
This move positions Kraken to operate as a custodian and trust entity under federal oversight, rather than relying solely on state-level money transmitter licenses. An OCC trust charter carries regulatory legitimacy that appeals to institutional clients and simplifies compliance across jurisdictions.
Ripple obtained its own national trust charter through Ripple Trust Company in 2023, enabling the blockchain firm to offer institutional custody and settlement services. Coinbase, through its Coinbase Custody subsidiary, already operates under similar federal oversight structures. Both competitors leverage these charters to expand beyond trading into infrastructure services.
Payward's application reflects Kraken's broader institutional push. The exchange has been expanding its prime brokerage and custody offerings to compete with traditional finance platforms. A trust charter would let Payward hold digital assets on behalf of institutional clients with explicit federal approval, reducing counterparty risk concerns that have plagued the industry since the collapse of FTX and subsequent crypto custody debates.
The OCC has shown willingness to charter crypto-focused institutions, though the process remains rigorous and time-intensive. Regulatory clarity around custodial operations matters as institutional capital continues evaluating crypto allocations. Large pension funds and asset managers remain cautious about custody arrangements lacking federal-level oversight.
Payward's charter application signals confidence in the regulatory trajectory under the incoming administration. The timing follows increased clarity around digital asset banking, though the OCC maintains discretionary authority on approvals.
Success here would strengthen Kraken's competitive position against Coinbase in institutional services while reducing reliance on state regulators. It also positions Payward as infrastructure rather than purely a trading platform, potentially opening avenues for partnerships with traditional financial institutions seeking crypto exposure through regulated intermediaries.
THE BOTTOM LINE: Kraken is pursuing federal banking legitimacy to compete for institutional custody business