DLT Custody

State of play.

• The OCC has granted Coinbase conditional approval for a national trust charter, a structural shift that would let a major crypto exchange hold client assets under federal banking supervision rather than state money-transmitter frameworks .
• The FCA has published CP26/13, translating the UK's Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 into concrete authorization requirements for custody services, trading platforms, and staking products — with an application window opening September 30, 2026 and enforcement exposure after October 2027 .
• EU MiCA's transitional period is expiring, with banks now representing roughly 20% of all 177 CASP licensees — CaixaBank's authorization being the latest — as the July 1, 2026 hard deadline for unlicensed operations approaches .
• Standard Chartered is considering a buyout of its crypto custody subsidiary Zodia, signaling that institutional custody infrastructure built as a separate venture may be pulled back into core banking operations .
• For counsel advising digital asset custodians, institutional clients, or fintech firms, the practical baseline is a simultaneous multi-jurisdictional licensing inflection: US federal charter pathways are opening, EU transitional relief is closing, and UK authorization timelines are compressing — all requiring client activity mapping now.

Where things stand.

• The OCC national trust charter is the US structural pivot for custody. Coinbase's conditional approval — joining Ripple and Circle — establishes a federal charter pathway for crypto-native firms to offer custody under OCC supervision, bypassing the patchwork of state trust charters . Community bank challenges to the OCC's approval are in play .
• EU MiCA has created a two-tier licensing dynamic. Banks benefit from a streamlined 40-day authorization pathway; non-bank CASPs face the full application process. With the transitional period expiring July 1, 2026 (June 30 in Spain), firms operating without a license face mandatory cessation — not a grace period extension .
• MiCA passport provisions are an active compliance vector. Banks licensed in one EU member state can passport custody and trading services cross-border, which triggers separate compliance obligations in each jurisdiction of operation .
• The UK regime is on a defined but compressed timeline. The FCA's CP26/13 consultation closes June 3, 2026; final guidance is expected in autumn 2026; the authorization application window opens September 30, 2026 and closes February 28, 2027; the regime takes effect October 25, 2027. Firms that miss the application window face enforcement exposure from day one of the new regime .
• Hybrid products and novel business models remain a perimeter ambiguity under CP26/13. The FCA has flagged these explicitly — firms offering lending, borrowing, or staking alongside custody need to map each activity against the proposed Handbook chapter before the consultation closes .
• Institutional custody consolidation is accelerating. Standard Chartered's reported consideration of a Zodia buyout reflects a broader pattern: custody infrastructure originally spun out to separate entities is being reintegrated into regulated banking operations as the regulatory environment clarifies .

Latest developments.

• Coinbase receives conditional OCC approval for a national trust bank charter, joining Ripple and Circle in the federal charter queue .
• FCA publishes CP26/13, the cryptoasset perimeter guidance consultation translating the FSMA 2000 (Cryptoassets) Regulations 2026 into Handbook obligations for custody, trading, and staking firms .
• CaixaBank obtains MiCA CASP authorization from Spain's CNMV for crypto custody, order execution, and asset transfers — banks now represent approximately 20% of 177 EU licensees .
• Standard Chartered is reported to be considering a buyout of Zodia Custody, its institutional crypto custody subsidiary, with potential integration into its corporate banking division .
• OCC finalizes national trust bank activities rule effective April 2026, providing the regulatory foundation for crypto-native trust charters .

Active questions and open splits.

• Federal charter vs. state trust charter: which governs custody obligations? Coinbase's conditional OCC approval raises unresolved questions about whether a national trust charter preempts state-level custody and fiduciary requirements — and what the charter conditions actually require before full activation .
• Community bank challenge to OCC crypto charters. Community banks are challenging the OCC's authority to grant national trust charters to crypto-native firms; the outcome could unwind the federal pathway entirely .
• MiCA passport scope for custody services. Whether a CASP license in one EU member state provides clean passporting rights for custody specifically — or whether host-state rules impose additional requirements — is not uniformly resolved across jurisdictions .
• UK perimeter ambiguity for hybrid custody products. The FCA has flagged lending, borrowing, and staking bundled with custody as requiring specific analysis under CP26/13 — the final guidance will determine whether these are single-authorization or multi-authorization activities .
• Custody subsidiary reintegration: regulatory and contractual consequences. If Standard Chartered absorbs Zodia, existing custody agreements, client onboarding structures, and sub-custody arrangements will need to be renegotiated under the acquiring entity's regulatory framework .
• Segregation and insolvency treatment of custodied digital assets. Across all three jurisdictions, the treatment of client digital assets in a custodian insolvency remains incompletely resolved — a live exposure for institutional clients holding assets with any of the newly licensed or chartered entities .

What to watch.

• Whether the OCC lifts or modifies conditions on Coinbase's national trust charter — and whether the community bank challenge produces an injunction that stalls the federal pathway.
• FCA CP26/13 consultation close on June 3, 2026: industry comment letters will signal where the perimeter ambiguities around hybrid custody products are most contested.
• EU MiCA transitional deadline of July 1, 2026: enforcement actions against unlicensed operators will define how aggressively national competent authorities treat holdovers.
• Standard Chartered's final decision on Zodia — a completed buyout would be the clearest signal yet that institutional custody is consolidating inside regulated banking entities rather than remaining in standalone vehicles.
• Whether additional crypto-native firms follow Coinbase in applying for OCC national trust charters, and whether the OCC publishes further interpretive guidance on permissible custody activities under the finalized rule.