Sony Bank’s Stablecoin Charter Bid Sparks Banking Industry Clash

The Independent Community Bankers of America (ICBA) has formally requested the Office of the Comptroller of the Currency (OCC) to reject Sony Bank’s application for a national trust charter through its proposed subsidiary Connectia Trust. In a letter sent to the OCC, the trade association representing small banks warned that the Japanese financial giant is seeking to ‘receive the benefits of a U.S. bank charter without becoming subject to the full scope of U.S. bank regulations,’ according to Mickey Marshall, the ICBA’s vice president and regulatory counsel.

The ICBA argues that Connectia Trust’s proposed stablecoin ‘shares many features with bank deposits,’ including electronic transfers, point-of-sale spending, and one-to-one dollar redemption, yet would avoid federal deposit insurance and Community Reinvestment Act requirements that apply to traditional banks. The group called Sony Bank’s application ‘an impermissible reinterpretation’ of federal law that ‘could foreseeably lead to consumer confusion and consumer harm in the event of insolvency.’

The banking association specifically questioned whether Connectia qualifies for Bank Holding Company Act exemptions limited to institutions that operate ‘solely in a trust or fiduciary capacity.’ The ICBA noted that trust banks lose that protected status if they allow deposits withdrawable ‘by check or similar means for payment to third parties,’ and expressed concern that Connectia’s plan to engage in the ‘business of banking and activities incidental to the business of banking permissible for a national bank’ appears to lay ‘the groundwork for issuing debit cards’ that would violate statutory restrictions.

Sony Bank’s application joins a growing list of crypto firms pursuing federal charters as the stablecoin market surges past $311 billion following the passage of the GENIUS Act in July. Major industry players including Coinbase, Crypto.com, Circle, Ripple, Bridge (Stripe’s stablecoin arm), and Paxos are all seeking similar regulatory approval, signaling a broader industry push for legitimacy within the traditional financial system.

Sony Bank filed its application in October to establish Connectia Trust, which would issue dollar-pegged stablecoins, maintain reserve assets, and provide digital asset custody services. The ICBA also raised concerns about Sony Group Corporation’s roughly 20% stake in Sony Financial Group, Connectia’s parent company, saying it ‘warrants further investigation of whether a controlling influence exists’ that would trigger bank holding company regulation.

The banking group cautioned that the OCC hasn’t resolved an uninsured national bank failure since 1933 and lacks the expertise to manage a complex crypto collapse, warning that ‘a single failure in key reassembly or system migration could result in permanent loss of access to billions in customer assets.’ This concern reflects broader anxieties about regulatory capacity in the rapidly evolving digital asset space.

The ICBA’s opposition to Sony Bank’s charter bid comes amid similar objections the group filed against Coinbase’s trust charter application earlier this month, prompting Coinbase Chief Legal Officer Paul Grewal to accuse lobbyists of ‘trying to dig regulatory moats’ rather than protect consumers. This pattern of resistance has drawn sharp criticism from crypto industry leaders who see it as an attempt to maintain traditional banking dominance.

Kadan Stadelmann, Chief Technology Officer at Komodo Platform, told Decrypt that the banking lobby’s concerns over Connectia are ‘overstated and driven by big-bank interests.’ He argued that ‘the risks to consumers of stablecoins are being exaggerated in the name of protectionism by big banks of their dominance in western finance,’ adding that ‘stablecoins decentralize money, and help decrease reliance on incumbent banks.’

Stadelmann advocated for regulators to foster innovation while ‘enforcing sensible rules like the GENIUS Act,’ contending that stablecoins serve ‘unbanked populations’ and can ‘minimize bank-run risks’ through on-chain transparency. This perspective highlights the fundamental philosophical divide between traditional financial institutions seeking to maintain existing regulatory frameworks and crypto innovators pushing for new models of financial services.