Crypto Companies Seeking Banking Licenses

On Mar. 18, 2025, Reuters reported that various crypto companies seek to become state or national banks, viewing this as a way to expand their businesses under the Trump Administration. What changes may occur for crypto companies once they gain banking status? Are they not already functioning as banks? And how are banks increasingly integrating cryptocurrencies into their services?

Multi-faceted crypto platforms and banks share overlapping functionalities, allowing users to store savings in crypto, grow capital through yield mining or staking, or acquire crypto loans. In areas with significant unbanked populations, particularly where smartphones are prevalent, crypto platforms already fulfill a bank-like role.

However, obtaining a license as a state or national bank is distinct from merely operating as a de facto bank-like entity. With the U.S. adopting a pro-crypto stance, crypto companies have a greater opportunity to evolve into fully-fledged banks. Modern regulators increasingly view crypto in a more favorable light, with reports indicating a rising interest among crypto firms seeking new opportunities.

SmartBiz recently acquired Centrust Bank, marking the first fintech company to obtain a bank charter since 2021, suggesting a potential trend.

Earlier this month, the Office of the Comptroller of the Currency overturned the anti-crypto stance of banks, allowing them to engage in cryptocurrency-related activities, including stablecoin operations and crypto custody.

Reasons for Crypto Platforms Aiming to Become Banks

First, these companies aim for bank status to boost their credibility. This could attract new individual and corporate clients, as banks are often viewed as more trustworthy than cryptocurrency ecosystems. The bank charter opens new opportunities, enabling significant scaling. Though bank charters entail additional scrutiny, they also provide a more legitimate image, crucial for business expansion.

Secondly, bank regulations pull crypto out of the grey zone, offering companies a clearer legislative environment and a predictable development trajectory, enhancing their strategic operations.

Another advantage of obtaining a bank charter is direct access to client deposits. Without it, crypto companies must borrow funds and incur high fees. With access to client deposits, companies can act and develop with fewer constraints.

The Intersection of Banks and Crypto Platforms

Despite the adversarial nature of blockchain towards banks since Bitcoin’s creation, both entities have coexisted and influenced each other’s operations. It appears that crypto no longer represents an existential threat to banks. While banks adopt blockchain solutions, crypto platforms have integrated banking services like loans and basic operations such as remittances.

Traditional banks leverage blockchain for various functions. The distributed ledger and smart contract infrastructure automate processes, reduce costs, enhance compliance, bolster funds and data security, and accelerate settlement speeds, particularly for cross-border transactions. Automation not only reduces costs but also minimizes human errors and deters fraudulent activities.

Institutions such as JPMorgan Chase and Goldman Sachs utilize blockchain to improve the Know Your Customer verification process. An international consortium of banks, Fnality International—which includes Barclays plc, HSBC Holdings, and others—employs blockchain for cross-border transactions. These examples are among many. Central Bank Digital Currencies (CBDCs) may reduce the need for intermediaries between citizens and central banks without hindering commercial banks’ ability to provide services like credit.

Simultaneously, cryptocurrency platforms serve as banks in underbanked rural areas with high mobile internet access, particularly in Sub-Saharan Africa and parts of Asia, where residents predominantly use crypto for remittances and savings.

The early 2020s marked the emergence of neobanks, digital-first banks offering traditional services. These customer-centric platforms leverage peer-to-peer solutions to gain an edge over traditional banks, often charging lower fees and providing user-friendly applications and favorable credit/loan conditions.

Popular digital banks such as Chime and Revolut serve millions of clients. According to Plaid, over 21% of individuals aged 21 to 56 use neobanks as their primary checking accounts.

The adoption of cryptocurrencies is a logical progression for many neobanks. Revolut serves as a notable example, supporting cryptocurrency operations alongside features like stock trading, currency exchange, and virtual cards.

We can anticipate more crypto companies evolving into banks as U.S. regulators and businesses continue to express mutual interest in this development. Observations from other countries may emerge soon.