OCC: Federal Law Preempts State Money-Transmitter Licensing Requirements

The OCC confirmed that the National Bank Act preempts state money transmitter licensing requirements.

In response to a request by a bank that provides cryptocurrency custody, trade execution services, and related services, the OCC concluded that the bank "may engage in its federally authorized activities nationwide and is not required to hold a state money transmitter license or satisfy a state law exemption." The OCC concluded that state laws are preempted by federal law because they prevent or significantly interfere with the bank’s exercise of its federally authorized powers. The OCC added that state supervisory and examination authority over the bank would conflict with the agency's exclusive visitorial powers under the National Bank Act.

The national crypto bank converted to an uninsured national trust bank in December 2025 with OCC approval. The bank said it plans to issue its own stablecoin and offer staking. After the conversion, the bank surrendered its Iowa money transmitter license, prompting the state to ask for the legal basis, because Iowa's licensing exemption covers only federally insured institutions and the bank is uninsured.