The recent attempts by major tech players to enter the banking sector have raised essential questions about regulatory frameworks and consumer safety. One notable case involves Sony Bank, which is seeking permission to engage in U.S. cryptocurrency banking—a move that has sparked considerable debate among industry stakeholders.

Sony’s Ambitious Proposition

Sony Bank has proposed the creation of a national trust bank named Connectia Trust. This entity aims to facilitate the management of reserves for a stablecoin linked to the U.S. dollar. Alongside this, Connectia would provide both custody and asset-management solutions tailored for digital currencies.

In March 2025, the Office of the Comptroller of the Currency (OCC) published Interpretive Letter 1183, outlining conditions under which national banks may engage in various crypto-related activities. However, it highlighted that trust banks do not accept deposits insured by the FDIC, a point that lies at the heart of ongoing discussions.

Advocates argue that Connectia Trust aligns with the OCC’s guidelines from the interpretive letter, while critics contend that it oversteps these regulatory boundaries.

Key questions remain about the operational structure of Connectia Trust, including how reserve management will be handled, what procedures will be in place during financial stress, and how digital assets will be safeguarded if the trust faces insolvency.

Community organizations are pressing for more transparency regarding these mechanics to ensure consumer protection and institutional accountability.

Industry Reactions and Concerns

On November 6, 2025, the Independent Community Bankers of America (ICBA) delivered a letter imploring the OCC to deny Sony’s charter application.

The ICBA raised concerns that allowing a corporate entity to establish a trust charter could blur the lines between traditional banking and non-banking products, potentially misleading consumers about the nature of their investments.

This could lead to unfair competition against smaller banks, hence their characterization of the situation as a form of regulatory arbitrage. The National Community Reinvestment Coalition echoed these sentiments, emphasizing that the OCC must uphold stringent consumer protections.

The opposition groups outlined three main issues: consumer misunderstanding regarding insurance coverage, difficulties in ensuring transparency of reserves, and the absence of established protocols to manage the dissolution of a trust bank holding crypto assets.

They emphasized the risks of financial panic surrounding a large stablecoin and the complexities of unwinding custody arrangements in such crises.

Examining Systemic and Consumer Risks

If a federally chartered trust were to issue a widely adopted stablecoin, it could set a challenging precedent for the entry of technology and financial companies into the banking space.

Consequently, many experts argue for a cautious approach from the OCC, advocating for a more stringent regulatory environment. Some commentators have pointed out that retail consumers might mistakenly perceive such tokens as traditional bank deposits, despite the lack of FDIC insurance.

The implications of this situation extend well beyond theoretical concerns. In times of financial distress, the liquidation of reserve assets could occur at alarming rates, complicating the transfer of digital assets within a regulatory framework designed primarily for traditional financial institutions.

Image credit: Wikimedia Commons, data from TradingView