United Texas Bank plans to become the bridge between the cryptocurrency and traditional banking sectors. Prior to the approval of the conversion, the United Texas Bank was a state-chartered financial institution. Recently, the Office of the Comptroller of the Currency reported its official decision on the approved conversion of United Texas Bank, a Texas state-licensed bank based in Dallas, and renamed it as “United Texas Bank, National Association.”
United Texas Bank remains to operate its headquarters and two other branches in Dallas, as noted by the Office of the Comptroller of the Currency.
The approval of the conversion was granted subject to conditions, such as (a) order issued by the Federal Reserve Board (FRB) and Texas Department of Banking (DOB) issued an order dated August 29, 2024, requiring the bank to sign into a consent order to suspend operations, and (b) strict adherence to the terms outlined in a joint letter agreement between the bank’s president and chairman.
The United Texas Bank has been operating under a consent order with Federal Reserve since 2024 in relation to deficiencies in its Bank Secrecy Act and Anti-Money Laundering compliance activity. In response, it established its own compliance framework known as “UTB PRISM SENTINEL”, a real-time blockchain monitoring system.
The conversion is considered one of the earliest cases following the Dodd-Frank Wall Street Reform and Consumer Protection Act in relation to institution with ongoing supervisory concerns. According to a PYMNTS report, when a bank is under Federal Reserve supervision and subject to regulatory actions issued by the board, it is required to secure a non-objection ruling when filing conversion to a national bank.
The Office of the Comptroller of the Currency filed a written notices and plans to the Federal Reserve and the Texas Department of Banking, and both agencies approved the conversion within 30 days, despite national law restricting conversion for banks subject to a major supervisory actions, according to President and CEO Beck.
According to Coinpost report, United Texas Bank holds federal licenses similar to other banks, such as Bank of America and JPMorgan Chase, allowing a full access to the Federal Reserve’s wire transfer and ACH systems and trust operations, while sustaining Federal Deposit Insurance Corporation deposit insurance after the conversion.
Beck underscored that cryptocurrency-linked businesses unable to secure access to Bank of America or Citibank will be able to secure access to the US dollar through United Texas Bank. He also added that the bank will launch a real-time payment network known as UTB Atomic, structured to provide a 24/7 liquidity system for the cryptocurrency market. In addition, the bank aims to launch digital asset data services and a full-service trust unit this coming summer.
Generally, the United Texas Bank reportedly holds $10 billion in monthly dollar settlements for foreign banks, over-the-counter desks, and major exchanges. Moreover, cryptocurrency firms exceed $120 billion for annual transaction processing volumes.
