OCC conditionally approves World Liberty bank; $20M Tier 1 capital floor

The OCC granted preliminary conditional approval to World Liberty Trust Company and set a $20M minimum Tier 1 capital requirement. The Aug. 14 decision permits the organizers to continue toward a national trust bank, but it is not final authorization to open.

The OCC’s Corporate Decision 1385 says final approval under 12 USC 27(a) will come only after all preopening requirements are met. The regulator may modify, suspend or rescind the preliminary approval if interim developments warrant it.

USD1 moves in-house

The proposed bank would issue and redeem dollar-backed stablecoins, maintain reserves, provide digital-asset custody as a fiduciary and offer conversion services to custody clients. It plans to issue USD1 nationwide to institutional customers, taking over the role from BitGo Bank & Trust, the current exclusive issuer and custodian.

The OCC also approved the planned acquisition of USD1 reserve assets and associated liabilities from BitGo under an exemption from specified Regulation W limits. That approval is tied to formation of the bank and does not remove the other opening conditions.

Capital and liquidity conditions

The bank must maintain at least $20M of Tier 1 capital. The greater of 50% of Tier 1 capital or $10M must be held in eligible liquid assets. It must separately maintain 180 days of operating expenses in eligible liquid assets without double-counting the liquidity required by the capital condition.

The organizers have 12 months to raise capital and 18 months to open the bank. The preliminary approval expires if either deadline is missed, absent the limited circumstances in which the OCC grants an extension.

CNBC reported that an entity affiliated with Donald Trump and family members owns 38% of World Liberty Financial. That ownership has prompted political scrutiny, but the immediate market event is the OCC’s licensing decision and the transfer path for USD1 operations.

Next milestones are the capital raise, the preopening examination, final OCC authorization and the transfer of USD1 reserves from BitGo. Until those steps are completed, World Liberty Trust Company cannot treat the conditional decision as permission to commence banking business.

Not investment advice. Verify all figures with primary sources before acting.