Cryptocurrency and fintech companies are looking for more and more banking charters in order to develop their businesses under the Trump administration, according to a Reuters report, which spoke to more than half a dozen industry leaders.
The movements intervene then that the administration is considered more respectful of the industry and there are possibilities of obtaining the licenses that regulators in previous administrations may have been slow to approve.
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Although discussions on the continuation of the banking charters are increasing, we do not know how many companies will ultimately be followed. It can cost tens of millions of dollars to start a bank, but there are advantages such as increased credibility with the general public.
According to Reuters, 144 banking charter requests were approved each year between 2000 and 2007, but this number decreased only five approved per year between 2010 and 2023. 2008 marked the year of the major financial crisis and subsequently a meticulous banks exam.
The Trump administration has reported the opening to innovation in the finance sector, in particular in the cryptocurrency industry. Since its inauguration of January, President Trump has created a cryptography working group, has signed a decree to create a National Bitcoin Reserve (BTC) and welcomed the first summit of white house cryptography.
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Cryptographic companies that have requested banking charters in the United States
Although it is rare that cryptographic companies are looking for banking charters in the United States, there are examples of some that have succeeded in the 2020s. Crypto Exchange Kraken was approved for a banking charter in Wyoming in 2020, Anchorage Digital Bank received its charter in January 2021, and Crypto Lender Nexo bought a house in a holding company federal in 2022.
Companies are faced with challenges when requesting banking charters in the United States, such as compliance with anti-flowage laws and membership in Bank Secrecy Act. The increase in regulatory monitoring and centralization can also be contrary to the spirit of Crypto, where decentralization is a fundamental value.
However, securing a banking charter is delivered with a major financial advantage: companies that do so can reduce the cost of capital by accepting deposits.
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