Major cryptocurrency companies like Circle, BitGo, Coinbase, and Paxos are seeking to obtain bank charters or licenses
The push comes as U.S. lawmakers advance stablecoin legislation. It would require stablecoin issuers to be federally chartered or licensed. These steps could give crypto companies the ability to offer more traditional banking services. This is apart from their existing blockchain-based products.
For years, cryptocurrency firms have primarily operated in the digital space. They focused on trading, staking, and others. As the sector matures, these companies aim to offer traditional banking services. Circle, the issuer of the USDC stablecoin, BitGo, a crypto custody provider, and Coinbase, a major U.S. exchange, are all pursuing bank licenses. Paxos, a blockchain infrastructure firm, is also joining the effort.
According to WSJ, the effort comes as Congress moves forward with legislation that will regulate stablecoins. Under the proposed rules, stablecoin issuers will be required to be federally chartered. This means they must meet the same standards as traditional banks.
The race for bank charters could signal a pivotal moment for the crypto industry. By securing licenses, these companies could offer deposit accounts, lending, and even potentially issue their stablecoins under the regulatory framework of a traditional bank.
The Bank for International Settlements (BIS) recently released a report warning that cryptocurrencies and decentralized finance (DeFi) have reached a “critical mass” and could now pose real risks to the traditional financial system. The BIS expressed concern that, without proper oversight, the rapid growth of DeFi could worsen inequality by benefiting the wealthy while leaving others behind.
To address these risks, the report recommends adding key compliance measures to DeFi platforms, such as know-your-customer (KYC) rules and clear information disclosure requirements. These steps, the BIS says, are essential to ensure financial stability and broader inclusion.
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🚨BREAKING: Crypto giants Circle, BitGo, Coinbase, and Paxos are looking to apply for bank charters/licenses to offer deposit and loan services, just like regular banks! This move comes as Congress progresses with stablecoin legislation requiring issuers to be federally Show more
⚡️JUST IN: The BIS released a report outlining key research areas as DeFi evolves, each presenting potential challenges to global financial stability.
