The crypto and financial technology sectors are seeing a rise in applications for state and national bank charters, driven by expectations for a more favorable regulatory environment under the Trump administration. Industry leaders note an increase in discussions and applications for charters.

“We have seen a lot more interest. We are working on several applications now,” - Alexandra Steinberg Barrage, a partner at law firm Troutman Pepper Locke, remarked. However, the industry remains cautiously optimistic due to ongoing changes in regulatory leadership.

Moving towards a banking status increases regulatory oversight but can lower borrowing costs and enhance legitimacy. Banking charters enable firms to collect deposits, significantly impacting their funding costs and capital accessibility, though these have stirred debates within the crypto community.

Historical resistance to becoming a bank persists amongst cryptocurrency firms, which often prefer to uphold the principles of decentralization and access to financial services for the underbanked.

Companies such as Paxos, Anchorage, and Protego have successfully transitioned into federally recognized entities after or obtaining their charters through the U.S. Office of the Comptroller of the Currency (OCC).

As new charter approvals have generally been scarce, with an average of five per year between 2010 and 2023, recent moves suggest regulatory agencies may consider streamlining the approval process. However, starting a bank continues to be costly, necessitating an estimated $20 million to $50 million to initiate operations.