Cryptocurrency companies in the United States are intensifying their entry into traditional banking by applying for national banking licenses.
Seizing opportunities from the cryptocurrency-friendly legal environment under the Trump administration has helped Ripple, Circle, BitGo, and other businesses develop cryptocurrency asset management and payment services nationwide.
MAIN CONTENT
Cryptocurrency companies like Ripple, Circle, and BitGo are applying for national banking licenses to expand financial services.
Circle plans to establish the first digital currency bank to strengthen the USDC ecosystem and comply with the GENIUS Act.
Kraken prioritizes integrating digital currency tools with financial services, without seeking comprehensive banking licenses.
Why are US cryptocurrency companies intensifying their applications for national banking licenses?
Experts from the Financial Times point out that the Trump legal environment is very supportive of cryptocurrency, stimulating companies to accelerate the national banking license application process to operate across the United States.
This license allows businesses like Ripple and Circle to provide cryptocurrency asset custody services and process payments without being limited by state-level licenses, greatly facilitating business expansion and enhancing credibility. Progress in legislation related to stablecoins is also a significant driver of this trend.
Applying for a national banking license allows cryptocurrency companies to operate comprehensive payment and asset custody services, while increasing transparency and trust among investors and customers.
Mark Thompson, CEO of a financial research company, 6/2023
What is Circle's plan for establishing a national digital bank?
Circle is in the process of applying for a license to establish the 'First National Digital Currency Bank' to build a solid foundation for USDC – one of the leading stablecoins globally – while complying with the GENIUS Act regarding digital asset regulations.
This not only enhances the ability to control stablecoin reserves but also increases safety and transparency in operations, thereby creating sustainable growth momentum for the cryptocurrency ecosystem according to traditional banking standards.
What specific steps are Ripple and BitGo taking in the banking license application process?
Ripple has applied for a master account at the Federal Reserve to directly hold stablecoin reserves, helping to better control and mitigate liquidity risks.
BitGo is also in the process of applying for a national banking license to expand its digital asset custody sector and provide nationwide payment processing services, developing the DeFi ecosystem.
What strategy does Kraken have when it does not seek comprehensive banking licenses but still expands services?
Instead of seeking full banking licenses, Kraken focuses on launching debit and credit cards at the end of the month, deeply integrating cryptocurrency tools with existing financial services.
This strategy allows Kraken to flexibly develop products, meeting diverse user needs without being subjected to strict constraints from traditional banking licensing processes.
In a favorable policy period, the coordination between cryptocurrency technology and traditional financial services is key to achieving broader acceptance.
Linda Zhao, Product Development Director of a major exchange, 7/2023
Considering the impact of the current legal environment, what are the main risks?
Although the Trump administration has provided a positive environment for cryptocurrency with friendly policies, uncertainty in license approval and new regulations remains a significant risk.
Market analysts note that regulations on stablecoins are gradually taking shape but lack synchronization, forcing cryptocurrency companies to prepare thoroughly to adapt to any legal scenario.
Compare the differences between Ripple, Circle, and Kraken in banking strategy
Characteristics Ripple Circle Kraken License Apply for national banking license and Federal Reserve account Apply for a license to establish a national digital bank Not applying for a comprehensive banking license Main services Asset custody, stablecoin reserve holding Build the USDC ecosystem, comply with the GENIUS Act Issue debit and credit cards integrated with cryptocurrency Strategy Focus on global operations through the national banking system Expand the digital currency roadmap with legal standardization Enhance integration of cryptocurrency tools with existing financial services
Frequently Asked Questions
What does a national banking license mean for cryptocurrency companies?
This license allows for nationwide custody and payment services, enhancing credibility and reducing legal barriers by state.
Why does Circle need to establish its own digital bank?
To strengthen the USDC ecosystem, ensure compliance with the GENIUS Act, and enhance stablecoin reserve control.
Is Kraken's not applying for a comprehensive banking license a disadvantage?
Not necessarily, when designing products to be more flexible and quickly adapt to integrated cryptocurrency financial services.
How does the Trump legal environment affect cryptocurrency?
A friendly policy helps promote companies to penetrate traditional financial services; however, regulatory stability is still unclear.
What is the biggest risk when expanding cryptocurrency banking services?
Uncertainty about license approval and lack of synchronization in new regulations on stablecoins and digital assets.
Source: https://tintucbitcoin.com/crypto-bung-no-nho-noi-long-my/
Thank you for reading this article!
Please Like, Comment, and Follow TinTucBitcoin to stay updated with the latest news about the cryptocurrency market and not miss any important information!
