Cryptocurrency firms race to gain banking footholds in the United States
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Cryptocurrency firms race to gain banking footholds in the United States
Digital banks and cryptocurrencies are becoming increasingly intertwined, as fintech companies seek to leverage the rapidly growing crypto assets to attract customers in the United States.
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New York-based Circle said obtaining a national bank trust charter would be an "important step" toward integrating digital assets into the broader financial system;
Photo: Michael Nagle/Bloomberg
Cryptocurrency firms are rushing into traditional U.S. banking, seeking to leverage what they see as a more favorable regulatory environment under President Donald Trump to further integrate into the financial system.
Payments group Ripple, stablecoin firm Circle, and custodian BitGo have applied for national trust bank charters, which would allow them to offer certain banking services, while crypto exchange Kraken plans to launch a debit card next month.
Arjun Sethi, co-CEO of Kraken, told the Financial Times that this represents a "natural convergence," adding the company plans to roll out debit and credit cards by the end of this month.
These moves highlight how cryptocurrency companies are seeking to expand beyond purely offering digital asset services. Industry executives' confidence has surged due to the Trump administration's openness to digital assets, in contrast to the perceived hostility from his predecessor, Joe Biden.
Arjun Sethi, co-CEO of crypto exchange Kraken, plans to launch debit and credit cards by the end of the month;
Photo: Ramsey Cardy/Sportsfile/Getty Images
New York-based Circle said securing a national bank trust charter from the Office of the Comptroller of the Currency (OCC), which regulates financial institutions, would be an "important step" toward integrating digital assets into the broader financial system. Anchorage Digital is the only cryptocurrency firm currently holding a national bank charter.
"This is the complete opposite of what many crypto companies originally said—'We don't need banks, we don't need laws, we're above it all,'" said Max Bonici, a partner at Davis Wright Tremaine. "Now they're saying, 'Please regulate us.'"
While national trust banks can hold assets and process payments, they cannot issue loans or directly accept customer deposits. Obtaining national trust status would exempt companies from needing to secure licenses individually from each state and improve their access to the financial system.
Crypto firms are accelerating their push into banking ahead of Washington discussions on stablecoin legislation, which could bring stablecoins—digital tokens designed to function like money—closer to mainstream finance.
"It truly opens up the U.S. financial market, essentially allowing for the emergence of stablecoins," said Adam Chernichaw, a partner at Pillsbury.
Stablecoins track the value of national currencies like the dollar and are becoming increasingly mainstream, with strong support from Trump and his administration. Traders use them to move between sovereign currencies and cryptocurrencies, while others use them for cross-border payments.
The proposed GENIUS Act would strengthen regulation of stablecoins and tie them more closely to U.S. Treasuries, which back dollar-pegged stablecoins. Only regulated banks and certain non-bank entities licensed by the OCC would be allowed to issue stablecoins.
Ripple CEO Brad Garlinghouse said the company has also applied to the Federal Reserve for a master account, which would allow it to hold stablecoin reserves directly at the central bank.
Digital banking and cryptocurrency are becoming increasingly intertwined, as fintech firms seek to harness fast-growing crypto assets to attract U.S. customers.
Vlad Tenev, CEO of Robinhood, said the company plans to launch banking services in the fall;
Photo: Chris Ratcliffe/Bloomberg
Retail brokerage Robinhood, where more than half of trading revenue came from crypto last year, plans to launch select banking services in the fall.
"We should be able to meet all your financial needs," CEO Vlad Tenev told the Financial Times. "So you don’t have to worry about taxes, estate planning, or moving funds around."
London-based neobank Revolut, which earns a significant portion of its revenue from crypto trading, has long-term ambitions to obtain a U.S. banking license, while Klarna CEO Sebastian Siemiatkowski plans to add crypto offerings to the consumer lending company’s product suite.
Meanwhile, major banks including Bank of America are exploring issuing their own stablecoins once U.S. regulations are finalized.
"This administration has signaled it will open up chartering in ways previous administrations did not," said David Portilla, a partner in the financial services group at Davis Polk.
But not all crypto firms diversifying into traditional consumer banking believe they need a bank charter. Kraken, the Wyoming-chartered crypto exchange, is launching its new app without applying for a charter or master trust.
"We don’t want to be a bank that offers mortgages. We just want to partner with those who provide the best services," Sethi said.
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