Following the 2022 crypto market scandal, including the bankruptcy of FTX, major crypto firms are actively seeking United States banking licenses. The move aims to integrate crypto services into the traditional financial system and rebuild public trust.
Why Eye U.S. Banking Licence?
The collapse of two crypto-friendly banks, Silvergate and Signature, in March 2023 left many crypto firms struggling to find financial institutions willing to handle their deposits or extend credit. Many turned to international institutions, particularly in Switzerland, attracted by the country’s clear regulatory framework and openness to digital assets.
Fast-forward to today, and crypto companies such as Circle, BitGo, Coinbase, and Paxos are exploring applications for industrial bank charters —according to a report by The Wall Street Journal, a U.S.-based media outlet. If approved, these licences would aid their legitimacy and enable them to offer services such as deposit-taking and lending under federal supervision.
Notably, the interest in the banking sector aligns with the U.S. pro-crypto stance. Recall that In January, President Trump signed Executive Order 14178, which established a framework for crypto assets while prohibiting the promotion of central bank digital currencies (CBDCs). Hence, these firms aim to maximize favourable regulations developing in the U.S.
Meanwhile, the desires are mutual as Deutsche Bank and Standard Chartered are reportedly expanding their crypto operations into the U.S. market. Both firms have expressed optimism about crypto. For example, the latter has predicted growth in crypto ETFs and partnered with OKX to launch programs that enable crypto to be used as trading collateral through bank custody.
Not the First
The pursuit of U.S. banking licenses by crypto firms is not the first attempt. In January 2021, Anchorage Digital made history by becoming the first crypto platform to receive approval from the Office of the Comptroller of the Currency (OCC) to operate as a federally chartered digital asset bank.
However, Anchorage’s journey of aligning crypto operations with traditional banking regulations has been met with challenges. In April 2022, the OCC issued a consent order against Anchorage Digital Bank for failing to implement an adequate regulatory compliance program. Recently, CryptocurrenciesToWatch reported that the firm is under investigation by the U.S. Department of Homeland Security.
