Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—OCC confirms Fidelity crypto bank does not need state money transmitter license, (Jun 9, 2026)

By Justin Marcus Smith, J.D.

The OCC opined that an Iowa state money transmitter law purporting to vest a state agency with visitorial authority over a national bank was “fundamentally inconsistent” with the National Bank Act, hence impermissible.

The Office of the Comptroller of the Currency (OCC) has issued interpretive letter #1192, stating that Fidelity Digital Assets, N.A. (FDANA), an uninsured national trust bank, may engage in federally authorized activities nationwide without having to hold a state money transmitter license or satisfy a state law exemption. The OCC reasoned that the National Bank Act (NBA) preempts such state laws because they “prevent or significantly interfere with” FDANA’s exercise of federally authorized powers. The heavily-footnoted letter stated this NBA preemption conclusion was “clear and unambiguous under applicable law and longstanding precedent.” The OCC said Iowa could not exercise visitorial authority over FDANA without running afoul of NBA preemption. The OCC qualified that its conclusions were based on the facts and circumstances FDANA presented.

Background. In December 2025, the OCC conditionally approved the application of Fidelity Digital Assets Service, LLC (FDAS) to convert to an uninsured national trust bank under 12 U.S.C. § 27(a). Up to that point, FDAS had been a New York-chartered limited liability trust company and held multiple state money transmitter licenses, including in Iowa.

Post-conversion, the bank is now known as Fidelity Digital Assets, N.A. (FDANA). FDANA holds itself out on its website as providing institutional-grade secure digital asset custody and trading services. FMR LLC, based in Boston, Massachusetts, is the “ultimate parent” of the Fidelity group of companies, including FDANA, like its predecessor FDAS.

The OCC interpretive letter stated that the bank provides cryptocurrency custody, trade execution services, and related services including: (a) digital asset custodial accounts; (b) transfer of assets services; (c) custodial cash accounts; (d) digital asset trade execution services; (e) digital asset services for individual retirement accounts; (f) settlement as a service; (g) collateral agency services; and (h) digital asset reporting. The OCC said the bank also intends to issue its own stablecoin, provide staking services, and provide asset management services to affiliates.

The OCC described how FDAS had surrendered its Iowa money transmitter license concurrent with its conditional conversion to a national bank. The Iowa state agency purportedly asked for a legal basis for the money transmitter license surrender, noting that banks or trust companies with federally-insured deposits are exempt from the Iowa money transmitter licensing requirements. The bank invoked NBA preemption and asked the OCC to confirm, which prompted the OCC to issue the interpretive letter.

Applicable law. The OCC acknowledged that Iowa state law provides its state agency with “supervisory authority” over licensees, including examination. However, the NBA “vests the OCC” with the power, among other things, to issue conversions from a state bank. In addition, the NBA, under 12 U.S.C. § 27(a), specifically recognizes national trust banks with operations “limited to those of a trust company and activities related thereto.”

The OCC expressed its view that, once chartered, a national bank may engage in a “wide range of activities authorized by federal law” which are not ordinarily subject to state law limits or state agency visitorial powers. The OCC said visitorial exclusivity prevents the confusion and uncertainty of rival oversight. The letter provided extensive footnotes to case law.

Conversion effect. The OCC said its conditional approval to convert FDAS to a national bank vested the resulting FDANA with federal authority to engage in fiduciary and non-fiduciary activities on a national basis. To conclude that it needs additional permission from Iowa, in this context, an additional permission to transmit money, would make such permission a “condition precedent” to exercising federally-conferred power and accordingly run afoul of NBA preemption.

The OCC letter continued, “The same applies to any similar state money transmitter licensing requirements that purport to apply to the Bank, including by limiting their licensing exemptions to a subset of national banks.” The OCC qualified by footnote here that the instant interpretive letter was not a preemption determination for purposes of 12 U.S.C. § 25b because such money transmitter laws are “not state consumer financial laws[.]” The footnote further qualified that 12 U.S.C. § 43a, which pertains to state laws about community reinvestment, consumer protection, fair lending, or the establishment of intrastate branches, was also inapplicable in the context FDANA presented.

Visitorial power. The OCC letter continued that the Iowa money transmitter licensing law vested the state agency with “robust jurisdiction” over licensees, including the right to production of books and records, periodic examinations, and administrative enforcement actions. The OCC construed these as visitorial powers “fundamentally inconsistent with the OCC’s exclusive visitorial powers under [the NBA,] 12 U.S.C. § 484 if applied to [FDANA].” The OCC expanded the same would be true for any similar state requirements.

Attorneys: H. Rodgin Cohen (Sullivan & Cromwell LLP).

Companies: Fidelity Digital Assets, N.A.; Fidelity Digital Assets Service, LLC; FMR LLC

MainStory: TopStory BankHolding BankingOperations FinTech GCNNews OversightInvestigations StateBankingLaws