FinTechs and crypto firms seek bank charters

Several cryptocurrency companies and FinTechs are seeking to become banks, driven by a more supportive regulatory environment. With President Donald Trump taking office, these firms believe they have a better chance to secure bank licenses that were previously difficult to obtain. Alexandra Steinberg Barrage, a partner at law firm Troutman Pepper Locke, noted that interest in bank applications has increased significantly. However, many companies remain cautious as they wait for the new banking officials to settle in. While obtaining a banking license means more regulatory scrutiny, it could also bring benefits like reduced costs and increased legitimacy. Carleton Goss, a partner at Hunton Andrews Kurth, highlighted that having a banking charter can lower borrowing costs because companies can rely on deposits. This surge in interest follows a sharp decline in bank charters approved by U.S. regulators, with just four applications granted in 2023, a historic low. Between 2010 and 2023, an average of five new bank applications were approved each year. There has been a push in Washington to support new bank establishments. Travis Hill, acting chairman of the Federal Deposit Insurance Corp., expressed a desire to encourage more new entrants into the banking sector to ensure it remains healthy and competitive.