- Crypto firms, including BitGo and Coinbase, are seeking bank charters to integrate into traditional finance.
- Stablecoin regulations advance, requiring issuers to obtain licenses from regulators.
- Trump’s vision of a Bitcoin superpower aligns with efforts to establish crypto in the financial system.
Crypto companies are moving to strengthen their associations with traditional finance by seeking bank licences. In the wake of regulatory challenges, the industry is undergoing a transition, with famed companies like Circle, BitGo, and Coinbase eyeing bank charters to work within the regulatory framework of banking. This move co-occurs with President Trump’s pledge to make the U.S. a BTC leader, noting a new phase of integration with the crypto industry.
The Push for Bank Charters in Crypto
According to a WSJ report, a number of high-profile crypto companies are developing ways to obtain bank charters or licenses that would allow them to operate like traditional banks. These firms are looking into the different forms of licenses, such as a national trust or an industrial bank, that they can acquire for deposits and making loans. Others are going for narrower licenses about stablecoin issuance, which is crucial for the whole crypto ecosystem.
BitGo is one of the firms seeking to apply for a bank charter. In addition, Circle, the issuer of the second-largest stablecoin USD Coin, and the popular crypto exchange Coinbase, are also weighing comparable steps. This regulatory change comes as Congress advance new legislation to control stablecoins, which would need issuers to obtain charters from regulators. These developments are setting the stage for more splendid integration of crypto assets into the traditional financial system.
Digital currencies linked to traditional money, such as the US dollar, have become popular in the cryptocurrency business. They help traders handle risky cryptocurrencies through an easier-to-use exchange platform. The largest stablecoin market features Tether at $145 billion and USD Coin from Circle at $61 billion.
The new regulations aim to manage the situation after the failures of FTX, together with Silvergate Capital and Signature Bank, over the past few years. The demise of crypto-friendly banks forced numerous banking institutions to discontinue service with crypto firms, which restricted their access to banking operations. The restoration of regulatory authority, allowing banks to streamline their crypto activities, provides new possibilities for crypto firms trying to build relationships with traditional financial institutions.
The Role of Trump’s Vision for Crypto
During the Trump administration, the move to integrate crypto into the mainstream finance space has picked up, but obviously, President Trump did not see it through. Such a promise of turning the U.S. into a Bitcoin superpower is what Trump has promised to achieve, and this is his vision of the U.S. becoming a global leader in the global crypto landscape.
The administration has indicated its support for crypto regulations conducive to the growth of the industry. The vision is consistent with other crypto firms’ efforts to secure bank charters and establish crypto’s place in the broader financial universe.
Despite the growing interest in crypto among banks, many remain cautious. Some banks, like Bank of America, have revealed interest in administering their own stablecoins once the regulatory framework is firm. Others, including U.S. Bancorp, are looking to relaunch their crypto custody services. However, some banks, such as KeyCorp, are taking a wait-and-see approach.
However, they remain reluctant, given the prospect of the risks associated with such as anti money laundering, scrutiny and regulation before grabbing the sector. The way traditional banks and crypto firms are dealing with each other, while there is much change in the evolution, is regulated by some things and one of key factors is the clarification of the rules.
