Overview
- The Office of the Comptroller of the Currency (OCC) granted OpenReserve Bank preliminary conditional approval to establish a national bank in Salt Lake City, Utah, on September 2, following a review period of nearly five months since its application submission.
- To proceed, OpenReserve must secure a minimum of $210 million in initial capital and maintain a Tier 1 leverage ratio of 12% over the first three years of operation.
- The bank plans to create a subsidiary focused on issuing and managing dollar-backed stablecoins, although this application has not yet been submitted to the OCC.
OpenReserve Bank, which is supported by prominent venture capital firm Andreessen Horowitz, has received preliminary conditional approval from the OCC to operate as a full-service national bank in Salt Lake City, Utah. This decision, communicated on September 2, concludes a review that began when OpenReserve filed its application on April 13.
The approval letter outlines specific conditions that must be met. OpenReserve is required to raise at least $210 million in paid-in capital, excluding organizational expenses, and must maintain a Tier 1 leverage ratio of no less than 12% for its first three years. The bank has 12 months to raise the necessary capital and 18 months to commence operations; failing to meet these timelines will result in the expiration of the approval.
Co-founder Diwakar Choubey, who launched OpenReserve with Richard Correia after their time at MoneyLion, noted that opting for a full-service charter rather than a national trust charter was a strategic choice. He stated, "We chose the national bank path deliberately," in a press release announcing the approval.
This approach distinguishes OpenReserve from many of its competitors in the crypto banking space, such as Coinbase, Circle, Ripple, Paxos, and BitGo, which have primarily pursued national trust charters. While trust charters allow for custody and fiduciary services, they prohibit deposit-taking and lending. A full national bank charter will enable OpenReserve to engage in both activities once it secures final approval.
OpenReserve's business strategy includes offering tokenized deposits, treasury management services, foreign correspondent banking, and a banking-as-a-service model tailored for institutional clients. Additionally, it plans to launch a subsidiary dedicated to issuing and redeeming U.S. dollar-backed stablecoins, although the application for this subsidiary has yet to be filed with the OCC. Any activities related to stablecoins will need to adhere to the GENIUS Act, the federal legislation regulating stablecoin operations that came into effect in July of the previous year.
In a related development, the OCC also granted preliminary conditional approval to British fintech company Revolut for a national bank in Connecticut, part of a broader initiative by Comptroller Jonathan Gould to integrate innovative technology firms into the federally regulated banking system.
This rapid approval process has faced scrutiny; Senator Elizabeth Warren expressed concerns in May that the recent approvals for crypto trust banks contravened the National Bank Act, asserting that these entities resemble crypto banks rather than true trust companies. Despite this, the OCC continued to approve charters, including the national trust charter for the World Liberty stablecoin venture linked to Donald Trump last August.
OpenReserve now has until September 2027 to raise the $210 million in capital and until March 2028 to commence operations; failure to meet either deadline will lead to the lapse of its preliminary approval.