Crypto and fintech firms are seeking bank charters under the Trump administration, aiming to expand operations and reduce borrowing costs, according to a Reuters report.
At least six industry executives said the new political climate presents an opportunity for crypto firms to boost credibility with customers by securing banking licenses. A bank charter allows a firm to operate as a bank, defining its structure, permitted activities, and regulatory obligations to ensure customer protection and financial stability.
“We’ve seen a lot more interest and are working on several applications now,” said Alexandra Steinberg Barrage, a partner at Troutman Pepper Locke. She noted that clients are “cautiously optimistic” but awaiting more clarity as Trump’s team appoints financial regulators.
Under the Biden administration, securing bank charters was difficult. Regulators were slow to approve applications, especially from crypto firms, reflecting a more cautious stance toward the sector.
Two sources involved in current applications said interest in bank charters has surged since Trump’s return to office. However, they are waiting to see how many firms will proceed with applications.
A bank charter imposes stricter regulatory oversight but offers benefits. Carleton Goss, a partner at Hunton Andrews Kurth working on three applications, said it could lower borrowing costs by allowing firms to draw on deposits and improve market credibility.
“It makes sense for them to get ahead of the curve and secure more capital at a lower cost,” said Goss.
Interest from Wall Street has also grown. In February, major banks explored IPO opportunities with crypto firms. Exchanges like Gemini and Bullish have shown interest in going public, while Kraken and stablecoin issuer Circle are considering similar moves.