Cryptocurrency companies are pushing into the U.S. banking system under President Donald Trump, taking advantage of the opportunities presented by the newly expanded regulatory framework.
Ripple, Circle, and BitGo are all applying for national trust bank licenses, while Kraken chooses to issue credit and debit cards without applying for a license. They want to collaborate with banks to develop services rather than becoming traditional banks.
MAIN CONTENT
Cryptocurrency companies want to legitimize and expand their operations within the U.S. banking system.
Stablecoin regulations are tightening, requiring collateral and stricter licensing.
Many major fintech companies are preparing to launch integrated crypto banking services, leveraging the open-door policy from the Trump administration.
Why are cryptocurrency companies intensifying their entry into the U.S. banking system now?
According to Arjun Sethi, Co-CEO of Kraken, this is a 'natural convergence' as cryptocurrency and banking collaborate to serve users more effectively. Kraken does not want to be a full-service lending bank, but to partner with others to provide services.
Companies like Ripple and Circle are applying for national trust bank licenses to hold assets and process payments directly on the U.S. banking platform. This replaces a myriad of state licenses, facilitating nationwide operations.
Crypto companies are charging into the U.S. banking system with full force under Donald Trump’s presidency, seeing a wide-open regulatory window.
Arjun Sethi, Co-CEO of Kraken, 2024, Financial Times Report
What does access to master accounts at the Fed mean for cryptocurrency companies?
Brad Garlinghouse, CEO of Ripple, has applied for an official account at the Fed so that Ripple can hold stablecoin reserves directly at the central bank like Wall Street banks. This is an important step in enhancing payment power and legitimizing assets in the U.S. financial market.
Trust bank licenses allow cryptocurrency companies to safely hold digital assets and process payments, although they are not yet permitted to lend or accept direct deposits from customers. This indicates a positive policy shift in the U.S. regulatory environment for cryptocurrencies.
How does the new stablecoin law affect the cryptocurrency industry?
The Genius Act bill currently under discussion will require stablecoins to be backed by U.S. Treasury bonds and only companies with licenses issued by the OCC will be allowed to issue stablecoins. This aims to create a more stable and transparent environment for digital assets, promoting cryptocurrency into the mainstream financial system.
Adam Chernichaw, Partner at Pillsbury, assesses that this law will help bring stablecoins deeper into the U.S. financial market. The Trump administration's support is a significant signal as stablecoins are widely used in cross-border transactions and fast payments.
Stablecoin regulations could finally integrate these tokens into the U.S. financial market in a serious way.
Adam Chernichaw, Partner at Pillsbury, 2024
What strategies are major fintech companies currently implementing regarding cryptocurrency and banking services?
Robinhood is preparing to launch integrated cryptocurrency banking services, aiming for comprehensive management from trading, taxes to asset planning. CEO Vlad Tenev emphasizes the desire to provide a comprehensive solution for users.
Revolut, the digital bank from London, is applying for a U.S. banking license, while Klarna is pivoting to leverage cryptocurrency technology in consumer lending. Bank of America is also expected to launch its own stablecoin once regulations are finalized.
Meanwhile, Kraken chooses a broad development path but does not register for federal banking licenses, focusing on wallet and payment card products.
Strategic Company Approaching Banking License Ripple is applying for trust bank licenses and Fed accounts, seeking Payment, directly managing stablecoins at Fed Circle is applying for trust bank licenses, seeking Issuing stablecoins, payments Kraken is skipping federal licenses, issuing payment cards No Credit, debit, cryptocurrency wallets Robinhood is developing integrated crypto banking features Preparing Comprehensive financial services Revolut is applying for U.S. banking licenses Preparing Cryptocurrency trading, digital banking
What risks and challenges do cryptocurrency companies face when approaching the traditional banking system?
Despite opportunities for scaling and legitimization, cryptocurrency companies still face new laws and stricter controls, particularly in risk management and asset transparency. Coordination with traditional banks also requires compliance with high standards of security and financial governance.
Max Bonici, a partner at Davis Wright Tremaine law firm, commented that: 'Current policies mark a major turning point as crypto companies are no longer avoiding the law but are calling for oversight and regulation.' This is both a challenge and an opportunity to enhance credibility and expand business.
Crypto companies have shifted from avoiding banks to actively seeking regulation.
Max Bonici, Partner Davis Wright Tremaine, 2024
Frequently Asked Questions
Why do cryptocurrency companies want trust bank licenses?
This license helps them legitimize operations, effectively manage payments and crypto transactions within the U.S. banking system, instead of needing approval from each state as before.
What can trust bank licenses allow?
Allows for the safe holding of crypto assets and processing of payments, but does not permit lending or accepting direct deposits from customers.
How does the new stablecoin law impact?
Stablecoins must be backed by U.S. Treasury bonds and can only be issued by licensed entities, enhancing market reliability and safety.
How is fintech like Robinhood preparing for this trend?
Robinhood wants to provide comprehensive financial services from crypto trading, tax management to asset planning to retain customers in the blockchain ecosystem.
Why is Kraken not applying for a federal banking license?
Kraken wants to focus on providing wallet and payment card services instead of becoming a full-fledged bank, avoiding complex and time-consuming licensing processes.
Source: https://tintucbitcoin.com/tien-dien-tu-hoat-dong-nhu-ngan-hang/
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