Cryptocurrency and fintech companies in the US are increasingly seeking bank charters to support business growth under the Trump administration.
Crypto Companies' Strive for Financial Growth
The Trump administration is known for its support of innovation in the financial sector, particularly in the cryptocurrency industry. During his presidency, crypto working groups were created, executive orders for a strategic Bitcoin reserve were signed, and the first White House crypto summit was held.
Opportunities and Challenges on the Path to Bank Charters
Despite the increased interest in bank charters, not all companies are ready to pursue this path. The process can cost tens of millions of dollars, but obtaining charters promises to boost credibility with the general public. Since the 2008 financial crisis, the number of approved bank charter applications has significantly decreased due to increased scrutiny.
Cases of Successful Companies
Some crypto companies have overcome challenges to obtain bank charters. For instance, the crypto exchange Kraken was approved for a charter in 2020 in Wyoming, Anchorage Digital Bank received its charter in 2021, and lender Nexo purchased a stake in a company owning a federally-chartered bank in 2022.
Acquiring a bank charter provides significant strategic advantages and an opportunity for crypto companies to strengthen their market positions, but requires overcoming considerable bureaucratic and financial barriers.
