Several %Cryptocurrency firms are reportedly applying for state and national bank charters, aiming to expand their businesses under the administration of U.S. President Donald Trump.
Crypto firms, as well as financial technology companies, are optimistic that they will receive bank charters from the Trump administration and more friendly crypto regulatory agencies.
Becoming a U.S. bank brings stricter regulatory oversight, but it can reduce borrowing costs and enhance a company’s legitimacy, say analysts. Bank charters allow lenders to lower their cost of capital by accepting deposits, for example.
In the past, cryptocurrency firms largely resisted becoming banks because of the enhanced regulatory oversight such a move would bring with it.
Also, many crypto purists claim that digital assets were created to circumvent the traditional financial system and banking model, and that decentralized finance remains the best way to improve access to financial services.
However, many crypto firms now appear to want to become banks, including %Paxos, %Anchorage, and %Protego, each of which is seeking a bank charter.
Other crypto firms, such as %Kraken and Avanti, have secured “Special Purpose Depository Institution” charters in Wyoming, making them state-regulated banks.
New bank charters in the U.S. have traditionally been rare. Between 2010 and 2023, regulators approved an average of only five per year, according to data from S&P Global.
Bank charter applications dwindled over the last decade due to regulatory hurdles. However, the Trump administration has signaled plans to streamline the application process.
%Bitcoin (CRYPTO: $BTC), the largest crypto by marker capitalization, is currently trading at $83,000 U.S.
