Trump-Linked Crypto Firm Has Drawn Fresh Scrutiny as U.S. Regulators Defend Stablecoin Oversight
Summary
- World Liberty’s bank charter bid faced fresh scrutiny during a House Financial Services Committee hearing.
- Jonathan Gould said the OCC will review World Liberty’s application under existing charter laws.
- Democratic lawmakers questioned World Liberty’s Trump family ties, foreign investors, and crypto partners.
The Trump-linked crypto firm World Liberty Financial Inc. has drawn fresh scrutiny in Congress as U.S. bank regulators defended their handling of stablecoin rules and charter applications.
The House Financial Services Committee heard sharp exchanges on Thursday as Comptroller of the Currency Jonathan Gould faced questions over World Liberty Trust Company’s application for a national trust-bank charter.
Representative Gregory Meeks, a New York Democrat, asked Gould whether he was “working for the American people” or acting as a “Trump fixer.” Gould rejected the accusation and said Democratic lawmakers had applied the only political pressure he had felt.
Gould told the committee that the Office of the Comptroller of the Currency would review the application under the law governing bank charters. He also said the agency was following ethics rules as it considers World Liberty’s request.
Democrats press OCC over World Liberty charter
Democratic lawmakers have argued that World Liberty’s ties to President Donald Trump and his family raise conflict concerns. They have also cited the firm’s foreign investors and crypto partners, including Binance, while questioning whether the company should receive a U.S. banking charter.
Senator Elizabeth Warren and other Democrats have previously pressed regulators over the same issue, according to Gould’s comments at the hearing. Gould called the pressure “unfortunate and unprecedented” while defending the OCC’s process.
World Liberty is also a stablecoin issuer, which placed the company inside a larger debate over how U.S. agencies should enforce the GENIUS Act.
Regulators move ahead With stablecoin rules
Federal Deposit Insurance Corp. Chairman Travis Hill told lawmakers that regulators had already proposed several rules tied to the GENIUS Act. Hill said the FDIC and other agencies would soon propose a rule requiring customer identification programs for stablecoin issuers.
The hearing focused heavily on how banks, credit unions, and stablecoin companies will operate under the new law. Regulators described the rulemaking process as ongoing, with several requirements still being drafted.
Kyle Hauptman, chairman of the National Credit Union Administration, told lawmakers that stablecoins could make payments faster in the United States. Hauptman said Americans may one day receive tax refunds or emergency government funds on weekends and holidays through stablecoin payment systems.
Representative Brad Sherman, a California Democrat and longtime crypto critic, rejected the idea of using stablecoins for government payments. Sherman told the committee he could not think of a worse idea, arguing that it would legitimize an alternative to the U.S. dollar.
Sherman also said the GENIUS Act bars stablecoin issuers from paying interest. He warned that lawyers may look for ways around that restriction and urged regulators to write rules strong enough to prevent evasion.
Fed faces questions over Kraken access
Federal Reserve Vice Chair for Supervision Michelle Bowman also faced questions about the Fed master account granted to crypto exchange Kraken.
Bowman said Kraken received only limited access to the payments system for an initial 12-month period. She told lawmakers the Fed would monitor the arrangement closely while it prepares formal rules for similar access requests.
Crypto firms are watching the Fed’s policy work because so-called skinny master accounts could give approved companies limited access to central bank payment services.