Forty-One Democrats Draw a Line on World Liberty Financial's Bank Charter
Forty-one House Financial Services Committee Democrats, led by Representative Gregory Meeks of New York, sent a letter to Treasury Secretary Scott Bessent on Thursday demanding a detailed accounting of how World Liberty Financial's national trust bank charter application is being reviewed by the Office of the Comptroller of the Currency.
The letter, dated February 19, 2026, does not merely ask for transparency. It makes three explicit demands: explain what safeguards prevent foreign government officials from leveraging the bank-chartering process, disclose the White House and Office of Management and Budget's role in national bank chartering decisions, and detail the Treasury Department's formal and informal review role in OCC chartering decisions. Bessent has until February 26 to respond.
The timing is deliberate. World Liberty Financial, the Trump family's cryptocurrency venture, applied to the OCC in early January 2026 through a subsidiary called WLTC Holdings LLC. The proposed entity, World Liberty Trust Company, would operate as a national trust bank purpose-built for stablecoin operations, specifically to issue and custody USD1, a dollar-backed stablecoin that has reached over $3.3 billion in circulation in its first year.
The $500 Million UAE Question That Won't Go Away
At the heart of the Democrats' concern sits a single transaction: a UAE senior royal secretly acquired nearly 50 percent of World Liberty Financial for approximately $500 million. Of that, roughly $187 million flowed to Trump-affiliated entities during the bank charter pursuit, according to the letter.
Meeks framed the issue in national security terms. "The Trump family's $500 million deal connected to the Emirati royal family is not only a matter of national financial instability, but it also carries serious national security implications," the letter states.
The concern is straightforward: a foreign government-linked investor holds half of a company seeking a national bank charter that would grant access to U.S. payment networks, reserve fund management, and digital-asset custody and exchange services. Democrats argue that without proper safeguards, this creates a channel for foreign influence over American financial infrastructure.
This is not the first time the UAE stake has triggered congressional scrutiny. Senate Democrats, led by Elizabeth Warren, previously asked the OCC to pause the application over Trump's ownership interests. OCC Comptroller Jonathan Gould declined, stating that charter applications should be an "apolitical and nonpartisan process" and that Congress expects timely action on applications received.
Why the OCC Charter Matters More Than Any Token Launch
A national trust bank charter is not a crypto license. It is a federal banking authorization that places the entity under OCC supervision and grants access to national payment rails. For World Liberty Financial, approval would transform USD1 from a DeFi-native stablecoin into a product backed by a federally chartered institution, a distinction that matters enormously for institutional adoption and regulatory standing.
The charter would allow World Liberty Trust Company to custody digital assets, manage reserve funds backing USD1, and provide exchange services. In the context of the ongoing stablecoin regulatory framework discussions around the GENIUS Act and CLARITY Act, a federally chartered stablecoin issuer with $3.3 billion already in circulation would immediately become one of the largest players in the regulated stablecoin space.
Democrats also raised concerns about Executive Order 14215, which they allege compromised the traditional independence of financial regulators. The letter questions whether White House oversight could undermine OCC autonomy in charter decisions, a charge that strikes at the heart of whether banking regulation is being governed by "law and prudential judgment rather than political proximity or convenience."
What This Means for USD1 Holders and DeFi Users
For anyone holding or transacting with USD1, as of February 20, 2026, the stablecoin continues to operate without a federal banking charter. The OCC review is ongoing, and the February 26 deadline for Bessent's response does not itself affect the charter timeline.
However, the political pressure creates real uncertainty. If the charter application becomes a sustained political battleground, it could delay approval indefinitely. Conversely, if the OCC approves the charter despite congressional opposition, USD1 gains a regulatory moat that most stablecoin issuers lack.
The broader stablecoin market is already in flux. Tether's USDT supply dropped 1.7 percent in its biggest monthly retreat since the FTX collapse, while Circle's USDC has been expanding aggressively. A federally chartered USD1 would add a third pillar to the stablecoin landscape, one with direct ties to the sitting president's family.
For crypto card users specifically, the charter's outcome could ripple through the ecosystem. Stablecoin-funded crypto cards rely on stable, liquid, and regulated dollar-pegged tokens. A federally chartered USD1 could become a preferred funding source for card issuers seeking regulatory clarity, or it could become a political lightning rod that some issuers avoid entirely.
The Escalation Pattern: Senate, House, and What Comes Next
The political pressure on World Liberty Financial has followed a clear escalation ladder. In January, Senator Warren asked the OCC to pause the review. The OCC declined. In February, Senate Democrats demanded a CFIUS review of the $500 million UAE stake. Now, 41 House Democrats are going directly to the Treasury Secretary with a deadline.
Each escalation has targeted a different pressure point: first the regulator directly (OCC), then the national security apparatus (CFIUS), and now the cabinet-level official who oversees the OCC (Treasury). The letter specifically asks about the relationship between Treasury and OCC decision-making, suggesting Democrats believe the approval process may not be truly independent.
Experts cited in the letter warned that "digital asset trust structures represent untested liquidity and resolution frameworks" and that the risks "cannot afford to sidestep." This language mirrors concerns raised during the ProShares IQMM launch, where the intersection of traditional finance and stablecoin reserves created novel regulatory questions.
The February 26 deadline creates a near-term catalyst. If Bessent responds substantively, it could either reassure markets about the independence of the review process or reveal uncomfortable details about executive branch involvement. If he stonewalls or misses the deadline, expect the rhetoric to escalate further, potentially into subpoena territory during an election cycle where crypto policy is already a wedge issue.
The Bigger Picture: Can Crypto Banking Survive Political Warfare?
World Liberty Financial's bank charter fight is not happening in a vacuum. The broader crypto regulatory landscape is undergoing rapid transformation. The SEC is exploring tokenized securities exemptions, the CFTC is pushing for the CLARITY Act, and the CME is going 24/7 on crypto futures. All of these developments assume some baseline separation between regulatory decisions and political interests.
If the World Liberty Financial charter becomes a case study in politically influenced banking regulation, regardless of which direction the influence flows, it could chill other crypto firms' willingness to pursue federal charters. The OCC has been signaling openness to crypto-native bank applicants, but the political toxicity surrounding this particular application could make the process unappealing for less politically connected ventures.
For the stablecoin ecosystem, the stakes are particularly high. The GENIUS Act framework envisions federally chartered stablecoin issuers as a cornerstone of the regulated digital dollar economy. If the first high-profile charter application devolves into partisan warfare, it could delay the entire framework's implementation.
FAQ
What is World Liberty Financial applying for? WLTC Holdings LLC, a subsidiary of World Liberty Financial, has applied to the OCC for a national trust bank charter. If approved, World Liberty Trust Company would be authorized to issue and custody USD1 stablecoins, manage reserve funds, and provide digital-asset exchange services under federal banking supervision.
What are the Democrats specifically demanding? The 41 signatories want three things from Treasury Secretary Bessent by February 26: an explanation of safeguards against foreign officials exploiting the charter process, disclosure of the White House and OMB's role in chartering decisions, and details on Treasury's formal and informal role in OCC reviews.
Does this affect USD1 holders right now? Not directly. USD1 continues operating as it has. The charter application's outcome will determine whether USD1 gains federal banking backing, which could affect its regulatory standing, institutional adoption, and integration with traditional payment systems.
Could the charter be blocked? Congressional letters cannot directly block an OCC charter. However, sustained political pressure, potential investigations, and the threat of legislative action could influence the timeline or conditions attached to any approval. The OCC has stated it intends to follow its standard review process.
Overview
Forty-one House Democrats led by Rep. Gregory Meeks have formally demanded that Treasury Secretary Scott Bessent explain how World Liberty Financial's national trust bank charter application is being reviewed, citing $500 million in UAE royal investment, $187 million flowing to Trump-affiliated entities, and potential compromises to OCC independence. The letter sets a February 26 deadline and represents the third escalation of congressional pressure on the Trump-linked crypto venture's banking ambitions in two months. For the stablecoin market and crypto banking sector broadly, the outcome will signal whether federal bank charters for crypto firms can survive political scrutiny or whether the regulatory pathway becomes collateral damage in partisan warfare.
Recommended Reading
- The White House Confiscated Phones to Force Banks and Crypto Into a Stablecoin Yield Deal, and Both Sides Blinked
- ProShares Launches IQMM, the First Money Market ETF Built for GENIUS Act Stablecoin Reserves
- Stripe's Bridge Wins OCC Conditional Approval for a National Bank Trust Charter, Putting Stablecoin Issuance Under Federal Oversight
