Kraken Parent Payward Applies for OCC National Trust Bank Charter

In brief

• Payward, which operates crypto exchange Kraken, filed for a national trust company charter with the Office of the Comptroller of the Currency.
• The proposed trust company would provide federally regulated digital asset custody services to institutional clients nationwide.
• This builds on Kraken Financial, Payward's Wyoming-chartered bank that already holds a Federal Reserve master account.

Payward, the parent company of crypto exchange Kraken, said Friday that it filed an application with the Office of the Comptroller of the Currency for a national trust company charter.

The proposed Payward National Trust Company would provide digital asset custody services to institutional clients requiring a federally regulated qualified custodian. Payward Co-CEO Arjun Sethi positioned the filing as part of a comprehensive banking strategy.

"Our long-held belief has always been that the right path forward for digital assets runs through robust, transparent regulation," Sethi said in a company blog post. "A national trust company provides the certainty institutions require and establishes the infrastructure to build the next generation of custody."

Sethi described the OCC application as complementing Payward's existing Wyoming Special Purpose Depository Institution. "Kraken Financial and what we are building with the OCC are complementary pillars of Payward's regulated banking strategy aimed at advancing an efficient and accessible digitally native financial system," he said.

Payward's application comes as federal regulators show increased willingness to charter new banking entities. Coinbase secured conditional approval in April, following approvals for Circle, Ripple, BitGo, and Paxos Trust Company and Fidelity Digital Assets last December.

"New entrants into the federal banking sector are good for consumers, the banking industry and the economy," said Comptroller of the Currency Jonathan V. Gould in December. "They provide access to new products, services and sources of credit to consumers, and ensure a dynamic, competitive and diverse banking system."

Kraken this week agreed to acquire stablecoin firm Reap Technologies this week in a $600 million deal, following last month’s $550 million acquisition of derivatives exchange Bitnomial. The firm filed last November for a still-impending IPO after raising $800 million in funding at a $20 billion valuation.

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