Crypto’s Bid for Trust Charters Sparks Alarm in Banking Industry

US banks and crypto firms are escalating a long-simmering clash over the future of digital-asset regulation — and the battle is increasingly centered on a narrow but powerful gateway: national trust-bank charters.

Two trade groups — the Bank Policy Institute and Independent Community Bankers of America — urged the Office of the Comptroller of the Currency this week to deny Coinbase Global Inc.’s application for a charter. The push follows a broader series of letters from BPI on Oct. 31 opposing similar bids from the likes of Circle, Ripple, Paxos and others.

The clash isn’t just about who gets ...