A number one US banking group has urged regulators to cease Sony Financial institution’s crypto enterprise, warning in opposition to its plan for a nationwide belief that may situation a dollar-pegged stablecoin.
Sony shocked markets final month when its banking arm filed to type Connectia Belief, a federally chartered establishment that may situation a $1-backed stablecoin, handle the reserves behind it, and supply digital asset custody and administration.
If accepted, Sony would be a part of a brief listing of main corporations looking for nationwide digital financial institution standing, alongside Coinbase, Circle, Paxos, Stripe and Ripple.
In a Nov. 6 letter to the OCC, the Impartial Neighborhood Bankers of America (ICBA) stated it “strongly opposes” Sony Financial institution’s software and argued the proposal leans on an impermissible studying of belief financial institution powers.
Group Accuses Sony Of Looking for Financial institution Advantages With out Obligations
Additional, the group warned that clients might confuse a stablecoin with a financial institution deposit, though nationwide belief banks are barred by statute from taking deposits.
Sony has filed with the @USOCC to create Connectia Belief, a nationwide crypto financial institution set to situation a U.S. greenback–backed stablecoin#Sony #Stablecoin #OCChttps://t.co/6vGJud8E7W
— Cryptonews.com (@cryptonews) October 16, 2025
ICBA stated belief charters exist for fiduciary work like property planning and funding administration, not for deposit-style merchandise. It requested the OCC to reject the plan, warning it might mislead clients and create dangers in a failure.
The group stated Connectia would “interact within the enterprise of banking” with out FDIC insurance coverage or Neighborhood Reinvestment Act obligations, a construction it known as an finish run that captures the advantages of a financial institution constitution with out the total rulebook.
ICBA added that Connectia wouldn’t must reinvest in low and moderate-income communities, even because it might collect funds from them.
Critics Say Sony’s Utility Lacks Key Particulars On Reserves And Redemption
On funds, ICBA pointed to the deposit-like performance of stablecoins, which might transfer electronically, be spent on the level of sale, and be redeemed one-for-one for {dollars}, options it stated mirror checking accounts that belief banks aren’t allowed to supply.
The submitting additionally raises Financial institution Holding Firm Act points, ICBA stated, as a result of nationwide belief banks can escape holding-company supervision provided that they meet strict situations. The letter questioned whether or not Connectia’s non-fiduciary custody plans and potential cost options would fulfill these exams, a failure that might pull Sony’s company mother and father into financial institution holding firm regulation.
Transparency turned a second entrance. The general public model of Sony’s software omits key particulars, ICBA stated, together with reserve composition, redemption mechanics in stress, the projected issuance scale, and contingency plans for runs or cyber occasions.
It requested the OCC to demand a fuller marketing strategy earlier than any determination, arguing that approving below a veil of secrecy would set a poor precedent.
Group Warns OCC Lacks Instruments To Resolve Massive Stablecoin Collapse
ICBA additionally questioned whether or not the OCC might safely resolve Connectia if it failed. The company has not appointed a receiver for an uninsured nationwide financial institution since 1933, and its guidelines had been written for conventional belief firms, not a big stablecoin issuer linked to risky crypto markets and complicated blockchain infrastructure.
A run on a Connectia token might pressure fast gross sales of Treasuries and spark broader stress, the letter stated. Handing off crypto custody throughout a receivership would require coordinating key shards and signing techniques, a course of the OCC has by no means carried out, and any failure might completely strand buyer belongings.
ICBA’s backside line was blunt, the OCC ought to deny the applying as a result of Connectia’s mannequin exceeds the standard scope of belief banks, mimics demand deposits, and fails the belief exemption below the Financial institution Holding Firm Act.
It added that approval would weaken the historic separation of banking and commerce and tilt the sphere in opposition to group banks.
The submit OCC Urged to Reject Sony Financial institution’s Effort to Be a part of the Crypto Banking Sector appeared first on Cryptonews.