Four of the crypto industry’s most influential companies—Coinbase, Circle, BitGo, and Paxos—have officially applied for U.S. banking licenses, according to the Wall Street Journal. This potential intersection of cryptocurrency and traditional finance could signal a new era of integration between digital assets and the American banking system.
The development comes on the heels of a dramatic regulatory shift under the administration of President Donald Trump.
Regulatory Certainty Drives Pursuit of Banking Licenses
Generally, mainstream banks have avoided digital asset firms due to legislative ambiguity and the collapse of crypto-friendly institutions, which was brought on by well-reported industry failures. However, since President Trump promised to make the US a “bitcoin superpower,” federal officials have begun loosening regulations, opening the door to a closer relationship between cryptocurrencies and banking.
Additionally, companies like Circle, which provides USDC, and Paxos, which issues USDP, are pursuing the necessary certifications driven by recent positive legislative changes. For instance, legislation requiring stablecoin issuers to be federally authorized or regulated is presently being advanced by Congress.
Later this year, banks dealing with cryptocurrency startups are expected to receive new regulatory guidelines that clarify contract regulations.
Circle and BitGo are seeking full banking charters, which would allow them to offer various services similar to traditional lenders, including lending and deposit-taking. This is despite Coinbase and Paxos also actively seeking the same.
Additionally, global behemoths such as Standard Chartered and Deutsche Bank are examining U.S. bitcoin activity, demonstrating the industry’s renewed vigor.
What Lies Ahead
Although it took a lot of financial resources and work, Anchorage Digital is now the only crypto-native company with a federal bank charter. As companies pursue their charters, Coinbase, Circle, BitGo, and Paxos face both opportunities and problems. This is as demonstrated by their experience as major players in institutional crypto lending and the custodian of BlackRock’s iShares Bitcoin Trust.
The successful licensing of major cryptocurrency companies could establish a significant precedent and accelerate the integration of digital assets and traditional banking.
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