According to Reuters, several industry insiders from these crypto firms see an opportunity to gain banking charters. Regulators had previously been slow to approve them.
Alexandra Steinberg Barrage, a partner at the law firm Troutman Pepper Locke, shared, “We have seen a lot more interest. We are working on several applications now.” However, she emphasized that while the interest is there. Many firms are cautiously optimistic, waiting for things to settle as the administration installs new heads at banking agencies.
Surge in Bank Charter Applications Reflects Growing Interest in Expansion
The push for bank charters has gained momentum, with multiple sources involved in potential applications noting a significant increase in discussions and preparations. While becoming a bank means dealing with more regulatory checks, it offers several advantages. Firms can lower their borrowing costs by accessing deposits, gaining more legitimacy with customers, and opening doors to expanded business and market opportunities. Carleton Goss, a partner at law firm Hunton Andrews Kurth, added, “It makes sense for them to get ahead of the curve, and in turn, get more credibility and capital at a lower cost by applying for a charter.”
This surge in activity follows a period of low new bank charters, with U.S. regulators approving only four in 2023. Between 2010 and 2023, the average number of approved bank charter applications was just five per year, compared to 144 annually between 2000 and 2007. The low number of approvals since the financial crisis has made it difficult for many firms to break into the banking space. Barrage and other regulatory lawyers recently suggested streamlining the charter process to make it more accessible.
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New bank charters would also increase competition within the industry, providing services to specific customer groups or regions. For online companies, obtaining a banking charter allows them to stay ahead of the regulatory game. The charter can serve as a ticket to more credibility, lower capital costs, and the ability to tap into a larger customer base.
More About Crypto & Banks
The SEC’s Crypto Task Force is set to host a series of roundtables to address important topics related to the regulation of crypto assets. The first roundtable will take place on March 21 from 1-5 p.m. This will provide a platform for industry leaders, regulators, and experts. They will discuss key issues impacting the evolving crypto landscape.
The SEC’s Crypto Task Force will host a series of roundtables to discuss key areas of interest in the regulation of crypto assets. The first roundtable will be on March 21 from 1-5 p.m. See agenda: https://t.co/prXBO9RzZC pic.twitter.com/2PzEIVT2DS
— U.S. Securities and Exchange Commission (@SECGov) March 17, 2025
These discussions aim to gather insights and inform future regulatory decisions, helping shape the future of the crypto market.
Disclaimer
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