Trump-era policy shift sparks crypto firms’ push for banking licenses: report

Cryptographic companies and fintech companies would apply to banking charters within the framework of the Trump administration, paving the way for greater financial legitimacy.

According to a recent reuters reportCryptographic companies seek to ask bank Charters to extend their businesses and potentially reduce loan costs. At least half a dozen industry leaders have confirmed that cryptographic companies “see an opportunity” under the Asset Administration to obtain credibility among customers by asking for banking licenses.

A banking charter is a legal license issued by a government which allows a company to operate and offer banking services. It defines the structure of the bank, the authorized activities and the regulations it must follow to protect customers and maintain financial stability.

“We have seen much more interest. We are working on several requests now, ”said law firm, Troutman Pepper Locke partner Alexandra Steinberg Barage.

Barage said that business customers are “prudently optimistic” under the new administration, but are waiting for more clarity while the Trump administration is starting to appoint financial agency leaders.

During the Biden administration, the security of banking charters was difficult, because regulators were slow or reluctant to approve them, in particular for cryptographic companies. The previous administration maintained a more negative position towards the crypto compared to the current administration.

Two other sources currently working on potential requests have told Reuters that discussions and preparations for banking charters have increased considerably since Donald Trump returned to functions. However, they are waiting to see how many companies will follow their applications.

Although a banking charter subjects institutions to stricter regulatory monitoring, it also has significant advantages.

Carleton Goss, partner of Hunton Andrews Kurth who works on three requests, said that a banking charter could help companies reduce loan costs based on deposits. It would also improve the legitimacy of a business and create new commercial and market opportunities.

“It is logical for them to get ahead of the curve and, in turn, obtain more credibility and capital at a lower cost by asking for a charter,” said GOSS.

Last February, Wall Street banks would have shown interest In the first public supply opportunities through cryptographic companies. The spark of interest intervened after major cryptography exchanges such as Gemini and optimistic expressed interest in becoming public. Kraken and stable transmitter Circle also explored public lists.