Cryptocurrency and fintech companies are increasingly seeking bank charters under the Trump administration

Cryptocurrency and fintech companies are increasingly seeking bank charters in an attempt to grow their businesses under the Trump administration, according to a report

Cryptocurrency and fintech companies are increasingly seeking bank charters in an attempt to grow their businesses, according to a report from Reuters, which talked to more than half a dozen industry executives.

The moves come as the Trump administration is seen as more industry-friendly and there are opportunities to gain the licenses that regulators under previous administrations may have been slow to approve.

While discussions about pursuing bank charters are heating up, it is unknown how many companies will ultimately follow through. It can cost tens of millions of dollars to start up a bank, but there are benefits such as increased credibility with the general public.

According to Reuters, 144 bank charter applications were approved every year between 2000 and 2007, but that number shrank to only five approved per year between 2010 and 2023. 2008 marked the year of the great financial crisis and subsequently increased scrutiny on banks.

The Trump administration has signaled openness to innovation in the finance sector, especially in the cryptocurrency industry. Since his January inauguration, President Trump created a crypto working group, signed an executive order to create a national strategic Bitcoin (BTC) reserve, and hosted the first White House crypto summit.

Related: Wyoming defends crypto-friendly bank charter regime in Custodia Bank’s lawsuit with Fed

The report highlights how this administration has been more receptive to new types of financial institutions.

“The Trump administration has shown an interest in approving new bank charters, which is something that the Obama administration was not keen on doing,” said an industry executive who requested anonymity to speak candidly.

“They are also more open to the idea of cryptocurrency and fintech companies applying for charters, which could lead to the creation of new financial institutions that are better suited to the needs of the digital age.”

Crypto companies that have applied for bank charters in US

Although it is uncommon for crypto companies to seek bank charters in the United States, there are examples of some who succeeded in the 2020s.

Crypto exchange Kraken was approved for a bank charter in Wyoming in 2020, Anchorage Digital Bank received its charter in January 2021, and crypto lender Nexo purchased a stake in a holding company that owns a federally-chartered bank in 2022.

Companies applying for bank charters in the United States face challenges such as compliance with anti-money laundering laws and the Bank Secrecy Act.

The increased regulatory oversight and centralization may also run contrary to the spirit of crypto, where decentralization is a core value. However, securing a bank charter comes with a major financial benefit: companies that do so can lower the cost of capital by accepting deposits.