The Bitcoin Banking Standard – Edition 15

Eight developments from the past eight weeks. The Senate left for August without voting on the Clarity Act; a cloture vote is set for September 15, with the stablecoin-yield provision and an ethics dispute still open. Treasury proposed the GENIUS Act rule defining who may issue and sell payment stablecoins, and the OCC put a November date on its own final rule. The FDIC moved to a two-phase deposit-insurance process and the OCC and FDIC finalized a rule defining "unsafe or unsound practice." The national trust charter queue added conditional approvals, one returned application, two denials, and new filings from Dakota, Zaria and Sezzle, while a Pittsburgh de novo picked its core before approval. Twenty-one banks and asset managers formed a company to issue a GENIUS Act stablecoin, 39 state banker associations announced a shared blockchain network, and Wells Fargo scheduled tokenized deposits for this fall. The SEC cancelled its Reg Crypto meeting, sent a custody proposal to the White House, and proposed a transfer-agent rule that recognizes blockchain records. Bitcoin-collateralized credit reached a $600 million miner loan, a conforming mortgage and an 8.99% retail credit line. And two security events, a Coldcard seed flaw and a Core Lightning advisory, put custody and node operations in front of risk committees.

Critical Conversations: The Fight for CLARITY & The Future of Money — Thursday, September 10, PubKey DC. Five days before the Senate votes on the Clarity Act, Galoy and Zaria are hosting an evening of conversation and debate at PubKey, 410 7th St NW, during Stablecon week. Leaders across Bitcoin, digital assets, banking, fintech, payments and policy will discuss what the bill does, what it leaves open, and what it means for the future of finance, pass or fail. Happy hour with food and drinks from 5:30 PM, speakers and debate from 6:45 to 8:00, then food and drinks until 10:00. Sessions are off the record. Invitation only; request a seat at luma.com/fightforclarity. Presented by Co-Create Events.

Senate sets a September 15 cloture vote on the Clarity Act as the yield provision stays contested

The Senate left Washington on August 8 without voting on the Digital Asset Market Clarity Act. Majority Leader John Thune confirmed through a spokesperson on August 6 that no vote would come before the break, said Democrats were "insistent on no Clarity vote," and added the bill would be "queued up first thing when we come back." He filed cloture on August 9 for a September 15 procedural vote. The Senate returns September 14 and sits until October 2.

Four items remained open as of mid-August, per The Block: ethics language covering public officials' digital-asset holdings, illicit-finance provisions pressed by Senator Catherine Cortez Masto, the reopened Section 404 dispute over stablecoin rewards, and the gap between the Senate draft and the House version, which contains no Section 404. TD Cowen's Jaret Seiberg put the odds of enactment in the next few months at 25%. On August 17, Senators Ruben Gallego and Angela Alsobrooks, the lead Democratic negotiators, signed onto a Warren-led bill that would bar regulators from approving charter applications closely linked to the president, following the OCC's August 14 conditional approval of a national trust charter for World Liberty Financial.

The yield question moved to the front in the final two weeks. ICBA president and CEO Rebeca Romero Rainey told Banking Dive on August 27 that the provision "has to be closed entirely," citing projections of $1.3 trillion in deposits converting to stablecoins over time, and said the votes to pass are not currently there. ABA chair Kenneth Kelly, chairman and CEO of First Independence Bank in Detroit, wrote in a September 2 American Banker op-ed that the GENIUS Act already bars issuers from paying interest, that some issuers have worked around it with reward programs, and that the Senate should close that gap so payment stablecoins do not function as deposit substitutes.

For banks: The two national bank trade groups hold the same position on Section 404 going into the vote. Section 401, which would give banks and credit unions affirmative authority to use digital assets for payments, custody, clearing and settlement, rides on the same bill. If cloture fails on September 15, the calendar leaves about two weeks of session before the October recess, and the GENIUS Act rulemakings described below continue on their own track.

Sources: CoinDesk | The Block | Banking Dive | American Banker (opinion)

Treasury proposes the GENIUS Act issuer rule; the OCC commits to a November final rule

The GENIUS Act passed its one-year anniversary on July 18 with no final implementing rules from any agency. On August 17, Treasury proposed a rule establishing that only authorized issuers meeting GENIUS Act standards may issue payment stablecoins for the U.S. market. The proposal extends liability to intermediaries: platforms that convert, redeem or repurchase a stablecoin, or that list an unregistered stablecoin shortly after issuance, could be treated as participating in an unlawful issuance. It reaches offshore activity aimed at U.S. persons, requires "reasonable due diligence" on foreign issuers, floats an offshore safe harbor modeled on SEC rules, and asks whether providers should audit stablecoin smart contracts, including "seize," "freeze" and "burn" functions. It was published in the Federal Register on August 18 with a 60-day comment period.

Two days later, Comptroller Jonathan Gould said at the SALT conference in Wyoming that the OCC has incorporated comments into its 376-page February proposal and is "very intent on moving quickly and getting a final rule out by November so that we will be able to start processing applications within the new year." On the Clarity Act's path, he said: "What we have is the GENIUS Act. That's been law for over a year now, and we need to execute on that."

The comment period on the joint FinCEN, Fed, FDIC, OCC and NCUA customer-identification proposal for issuers closed August 21. The Bank Policy Institute and The Clearing House asked regulators to state that CIP requirements apply to relationships established by secondary-market intermediaries such as exchanges and custodians; Circle argued that requesting redemption alone should not make a holder a customer. Separately, the ABA asked FinCEN and OFAC for four changes to the BSA and sanctions rules for issuers, including that obligations fall on issuers and do not reach reserve custodian banks or other service providers.

For banks: The issuer rule's intermediary-liability provisions, if adopted, would apply to issuers and to any institution that converts, redeems or lists a stablecoin. The CIP question of who counts as a customer in the secondary market is unresolved, with bank trade groups and issuers on opposite sides. The statutory effective date is January 18, 2027, and Treasury's comment window closes in mid-October.

Sources: U.S. Treasury | American Banker | The Block | PYMNTS

FDIC adopts a two-phase de novo process; OCC and FDIC finalize a rule defining "unsafe or unsound practice"

The FDIC announced on August 10 that deposit-insurance applications received after August 15 move through a two-step review. Applicants that satisfy the requirements receive contingent authorization within 120 days, then have a year to complete the organizational work before a final decision. Chairman Travis Hill said improving the de novo process "has been a key priority for the FDIC" and that "a healthy pipeline of new entrants is critical to the long-term vitality of the banking sector, particularly for community banks." Organizers are encouraged to hold a pre-filing meeting, at which a dedicated case manager is assigned.

The OCC endorsed the change in News Release 2026-67 on August 11. Comptroller Gould said "de novo chartering is a sign of a healthy banking system" and that "entities that engage in legally permissible activities, including those involving digital assets and other novel technologies, should have a path to becoming a national bank." The release states the OCC received an average of fewer than four charter applications per year from 2011 through 2014, against 40 de novo applications in the last 18 months, and that a full-service national bank received final approval and opened for the first time in five years.

On August 27, the OCC and FDIC finalized a joint rule that for the first time defines "unsafe or unsound practice" in regulation. It directs examiners to focus on material financial risks, raises the bar for Matters Requiring Attention, and creates a non-binding "supervisory observations" category. The OCC separately issued revised examination guidance generally capping suspicious-activity-report lookbacks at one year and requiring deputy comptroller sign-off for lookback MRAs.

For banks: Organizers now have a fixed 120-day milestone at both agencies and a named case manager from the pre-filing meeting onward. For existing institutions, the supervision rule changes what an examiner can write up as an MRA and what moves to the observations category; the SAR lookback cap is a separate change to BSA exam practice.

Sources: American Banker (FDIC) | OCC News Release 2026-67 | American Banker (supervision rule)

The charter queue: conditional approvals, a returned application, two denials, and new filings

Sony Bank received preliminary conditional OCC approval on July 9 for Connectia Trust, National Association, a $40 million New York-based national trust bank to support dollar stablecoin issuance. Circle's national trust bank has been legally in operation since July 24; CFO Jeremy Fox-Geen described the charter as "regulatory bedrock in advance of already-existing law and expected regulation." The OCC conditionally approved a national trust charter for World Liberty Financial on August 14.

The OCC returned Zerohash's national trust application on July 17 as materially deficient, a return rather than a denial; the company said it would refile with a narrower scope. Wise and Bunq were denied outright in the same period. New filings include Dakota (custody, stablecoin issuance and settlement, no deposits), Zaria (a trust-only bank to act as indenture trustee on Bitcoin-backed securitizations, with no deposits, lending or issuance), and Sezzle, which switched from an industrial loan company filing to a national bank charter and intends to file by the end of September. Nayax filed for a Connecticut innovation bank charter.

Two September 2 announcements round out the period. Sagehaven Bancorp, a proposed digital-centric national bank in Pittsburgh that filed with the OCC and FDIC in July, selected Nymbus as its core provider ahead of its capital raise, with an April 2027 opening target. TabaPay agreed to acquire Transact Bank in Denver, backed by $155 million led by FTV Capital, to obtain an OCC charter; the deal is expected to close in the fourth quarter pending OCC and Fed approval.

For banks: The trust-charter route now has examples of every outcome: full approval, conditional approval, return, and denial. Zaria's filing is a fiduciary role, indenture trustee, that BNY Mellon, Wilmington Trust and WSFS hold today. Sagehaven's timing shows a core decision made roughly two months after filing and before approval. All pending items remain subject to regulatory action.

Sources: CoinDesk (Sony) | American Banker (Circle) | CoinDesk (Zerohash) | American Banker (Zaria) | Banking Dive (TabaPay)

Twenty-one banks form a stablecoin issuer; 39 state associations launch a shared network; Wells Fargo schedules tokenized deposits

Twenty-one financial institutions, including Bank of America, Citi, Goldman Sachs, Wells Fargo, PNC, Capital One, TD, UBS, Santander, BBVA, Deutsche Bank, MUFG and Fidelity Investments, announced on September 1 that they will establish a jointly backed company in the second half of 2026 to issue a U.S. dollar stablecoin for payments and digital-asset settlement, with launch targeted for the first half of 2027 and a euro token as the stated priority for expansion. The group said it intends to meet GENIUS Act and EU MiCA requirements. Banking Dive notes little overlap with the 140-company Open USD initiative announced in June; BBVA is the only common backer and JPMorgan appears on neither list.

On August 25, 39 state banker associations announced the BankChain Alliance, an industry-owned blockchain network for community banks. On August 4, Wells Fargo said select corporate clients will be able to move and settle funds 24/7/365 through tokenized deposits starting this fall, opening with USD and GBP cross-border payments; the bank positions tokenized deposits as commercial bank money with the same deposit-insurance eligibility as its other deposits, and CEO Charlie Scharf told CNBC that clients ask about tokenization "because they're curious about it." American Banker's Value of On-Chain Survey 2026 found nearly two-thirds of banks are offering or developing tokenized deposits for corporate clients.

For context: at the Kansas City Fed's Jackson Hole symposium on August 27–28, BIS General Manager Pablo Hernández de Cos argued that tokenized deposits preserve the two-tier banking system and interoperate more easily than stablecoins on permissioned platforms. A Dallas Fed research note dated August 25 estimated that if tokenized deposits make depositors 10% more rate-sensitive, U.S. banks could lose about $700 billion of capacity to hold long-term interest-rate risk. Wyoming's Stable Token Commission added on-chain reserve verification and a mint control to its state-issued FRNT token on September 2.

For banks: Three bank-affiliated stablecoin or tokenization efforts are on the record with different memberships and governance, and the largest banks are running tokenized-deposit programs in parallel. For institutions outside these groups, the open items are which network to connect to and how the resulting balances are held and accounted for alongside dollar deposits. The Dallas Fed figure is a model estimate under a stated assumption.

Sources: CoinDesk (consortium) | Banking Dive | PYMNTS (BankChain) | American Banker (Wells Fargo) | Banking Dive (Jackson Hole)

SEC: Reg Crypto meeting cancelled, custody proposal sent to the White House, transfer-agent rule proposed

The SEC cancelled the August 14 open meeting at which it had planned to propose Regulation Crypto, a tailored offering regime for certain investment contracts, citing "an unforeseen scheduling issue" and moving it to "a later date." The innovation exemption for tokenizing securities, expected to move alongside it, was also delayed after concerns from Wall Street and the White House.

On August 26, the SEC sent a proposed rule on custody of investment adviser client assets, including digital assets, to the Office of Management and Budget, the preliminary step before a formal proposal, which could come as soon as October. It replaces the 2023 attempt that would have confined client digital assets to a narrow set of qualified custodians and was withdrawn last year.

On September 1, the agency proposed a rule updating its transfer-agent regulations, which date to the 1970s, to allow blockchains to serve as official records of transactions, paired with new operational controls in areas such as cybersecurity. It is open for a 60-day comment period. Commissioner Hester Peirce raised whether transfer agents should be permitted to collect wallet addresses in place of names and physical addresses. The SEC also set a September 17 roundtable on round-the-clock U.S. securities trading with NYSE, Nasdaq, DTCC, State Street, Citadel Securities, Cboe and Robinhood.

For banks: The custody rule decides which institutions may safeguard adviser clients' digital assets, and the prior version would have narrowed that set. The transfer-agent proposal would make a blockchain an acceptable official record of ownership for institutions acting as transfer agents or custodians of tokenized securities. Reg Crypto has no new date.

Sources: CoinDesk (Reg Crypto) | CoinDesk (custody) | CoinDesk (transfer agent)

Bitcoin-collateralized credit: a $600 million miner loan, a conforming mortgage, an 8.99% retail line, and a custody consolidation

MARA Holdings pledged 18,750 BTC, roughly 53% of its holdings and valued near $1.2 billion at closing, to secure $600 million across two term loans from Coinbase Credit and Two Prime Lending, closed August 4. Two Prime's tranche carries a fixed 7.65% rate and matures in August 2028. Two Prime CEO Alexander Blume said filings now show "detailed provisions covering how collateral is held, margined and liquidated," and named Ledn and Kraken as expanding the market through asset-backed securities and warehouse facilities.

At the retail end, Coinbase and Better Mortgage announced general availability on August 26 of a Bitcoin-collateralized mortgage designed to conform with Fannie Mae standards, after funding the first such loan in June. Galaxy Digital launched a retail credit line on August 25 at 8.99% APR with no origination fee, instant funding in USD or USDC, and no rehypothecation of collateral, initially in 40 states. Galaxy Research puts the digital-asset lending market at $67.4 billion in early 2026, down 14% from a $78.7 billion peak in late 2025.

On the provider side, BitGo completed its acquisition of NYDIG's institutional trading business on August 27; about 30 employees and the institutional client relationships moved to BitGo, and NYDIG said it will concentrate on power generation, mining and data centers.

For banks: Public loan terms now exist at institutional scale: a two-year fixed-rate term loan at roughly 2:1 collateral coverage. The mortgage product uses Bitcoin for the down payment without margin calls, a different structure from an LTV-monitored line. NYDIG's exit from institutional trading changes the list of bank-facing Bitcoin service providers.

Sources: CoinDesk (MARA) | Bitcoin Magazine (Coinbase/Better) | The Block (Galaxy) | BitGo 8-K exhibit

Two security events: the Coldcard seed flaw and a Core Lightning advisory

A configuration error in Coldcard hardware wallet firmware, introduced in March 2021, routed seed generation to a weaker software randomness source instead of the device's hardware generator. Galaxy Research attributes roughly 1,596 BTC, over $100 million, stolen from about 7,300 addresses to the flaw, with at least 15 attackers exploiting it and no physical access required. Analysis by Block's Bitcoin engineering team found some models produced seeds with 72 bits of entropy instead of the intended 128. Coinkite has released corrected firmware; affected users must generate new seeds and move funds.

Core Lightning developers issued a warning on August 27 after a wave of AI-generated CVE reports received since early August turned out to include several genuine vulnerabilities. Operators were told to upgrade as soon as the patch lands and, if they cannot, to restart nodes with the --offline flag rather than power down. Details are under a two-week embargo; severity has not been disclosed. Separately, a volunteer group running AI models against Bitcoin codebases filed 4,962 findings across 390 projects in about a day, including 85 rated critical.

For banks: The Coldcard flaw is a self-custody event; remediation requires a new seed and a funds move, and it has surfaced in due-diligence questions about hardware-wallet dependence. The Core Lightning advisory gives any institution running Lightning infrastructure, directly or through a vendor, a patch window to manage and a specific incident instruction: keep nodes online in restricted mode.

Sources: CoinDesk (Coldcard) | CoinDesk (Core Lightning) | CoinDesk (AI findings)

What to Watch

• Clarity Act cloture, September 15. The Senate returns September 14 and sits until October 2. Section 404 yield language and the ethics provision are the open items.
• Circle Arc mainnet, September 16. Initial validators named: BlackRock, DTCC, Global Payments, Mastercard, Visa, Standard Chartered and ICE.
• SEC round-the-clock trading roundtable, September 17.
• Sezzle OCC filing, end of September. The company expects OCC, Fed and FDIC approvals to take 12 to 18 months.
• UK stablecoin regime, September 30. FCA authorization applications open, with a temporary £40 billion issuance cap per systemic stablecoin.
• CME v. CFTC, October 2. CME's opposition to the CFTC's motion to dismiss its Kalshi perpetuals suit is due.
• Treasury GENIUS Act comments, mid-October. The 60-day window runs from August 18 Federal Register publication.
• MAS stablecoin consultation, October 16. Singapore's proposal pairs 100% segregated reserves with a yield ban and cites the GENIUS Act and MiCA.
• OCC GENIUS Act final rule, November. Per Comptroller Gould, with issuer applications processed in the new year.
• Fed limited payment account framework, by year-end. Comments closed July 27; more than two dozen community banks objected, and Coinbase and Payward asked for ACH access and higher balance limits.
• GENIUS Act effective date, January 18, 2027.

Looking to integrate Bitcoin products into your financial institution? Learn how at galoy.io. Track developments between issues on the Regulatory Radar.