Crypto Firms Rush for US Bank Charters Amid Favorable Trump Era Regulations

Crypto companies are aggressively seeking entry into the US banking system, leveraging what they perceive as a favorable regulatory environment under the Trump administration. Several prominent firms, including Ripple, Circle, and BitGo, have applied for national trust bank charters. These charters would allow them to custody crypto and handle payment processing, effectively bypassing the need for state-by-state licensing and providing a smoother path to operate nationwide.

Kraken, another major player in the crypto space, is taking a different approach. Instead of pursuing a charter, Kraken is focusing on launching debit and credit card services, set to debut before the end of the month. Arjun Sethi, Kraken’s co-CEO, described this move as a “natural convergence,” emphasizing that the company does not intend to become a full-service lender but will collaborate with partners to offer mortgage and other financial services.

This push for legitimacy is driven by a desire to integrate more formally with the US financial system. Circle, for instance, believes that obtaining an OCC license will facilitate this integration. Ripple’s CEO, Brad Garlinghouse, has already applied for a master account at the Federal Reserve, which would enable Ripple to hold stablecoin reserves directly at the central bank, similar to traditional Wall Street banks.

Anchorage Digital currently holds the only national bank charter in the crypto industry, but the competition is heating up. These trust bank licenses do not permit lending or direct customer deposits but offer significant advantages in terms of regulatory compliance and operational efficiency. The political climate under the Trump administration is seen as more favorable to crypto charters compared to the Biden administration, marking a shift from the industry’s earlier stance of operating outside traditional financial regulations.

While crypto firms are making their moves, Washington is also taking steps to regulate the industry. The proposed Genius Act aims to impose stricter rules on stablecoins, requiring them to be backed by US Treasuries and issued only by firms with proper licenses from the OCC or regulated banks. This legislation is seen as a way to integrate stablecoins more fully into the US financial market, with support from the Trump White House.

Other fintech companies are closely monitoring these developments. Robinhood, which derived over 50% of its transaction revenue from crypto last year, is preparing to introduce banking features in the fall. Its CEO, Vlad Tenev, aims to provide comprehensive financial services, including taxes and estate planning. London’s Revolut, a neobank with significant crypto trading activity, is also eyeing a US banking license. Klarna, led by Sebastian Siemiatkowski, is exploring the transformation of its consumer lending business into a crypto-focused entity.

Even traditional financial institutions like Bank of America are preparing to enter the stablecoin market. Once the regulatory framework is finalized, the bank plans to issue its own stablecoin. This move is seen as a significant shift from the previous administration’s stance, which was more cautious about embracing crypto and stablecoins.

Not all companies are following the same path. Kraken, which already holds a state-level license in Wyoming, is bypassing the federal charter process altogether. The company is focusing on developing crypto tools and card services rather than becoming a full-scale bank. This approach reflects Kraken’s strategic decision to leverage its existing regulatory compliance while expanding its service offerings.