Main Points:
- Major crypto firms—including Circle, BitGo, Coinbase, and Paxos—are preparing applications for U.S. bank charters to integrate more closely with the traditional financial system.
- Applicants will pursue a range of licenses: full-service national and state charters, limited-purpose trust bank approvals, and industrial bank licenses tailored to stablecoin issuance or custodial services.
- A pro-crypto shift in U.S. policy under the current administration, coupled with new FDIC guidance clarifying institutions may engage in crypto activities, has removed key regulatory roadblocks.
- Legacy banks such as Deutsche Bank and Standard Chartered are exploring expanded U.S. crypto operations, signaling traditional finance’s renewed appetite for digital assets.
- Crypto firms are simultaneously innovating beyond charters by launching new cross‑border payment rails and stablecoin products aimed at remittances and merchant services.
1. The Next Frontier: Crypto Firms Pursue Banking Charters
Major crypto platforms are making a concerted push toward obtaining formal banking charters in the United States. Circle and BitGo, best known for the USDC stablecoin and institutional custody solutions respectively, are preparing federal bank charter applications that would allow them to accept deposits and extend lending products under full banking supervision. Simultaneously, Coinbase and Paxos are evaluating similar pathways, weighing national charters against state-level trust charters that restrict permissible activities to custody of customer assets and stablecoin issuance.
This marks a strategic departure from the prevailing dynamic of the past few years, when major U.S. banks shunned crypto-related entities amid heightened scrutiny. The Federal Deposit Insurance Corporation (FDIC) and other regulators had warned of “reputational and operational risks” associated with crypto business lines, leading to widespread debanking of firms active in digital assets. By contrast, a successful charter would position these crypto firms as insured depository institutions—granting them unprecedented access to Federal Reserve payment systems, deposit insurance, and a recognized regulatory framework.
Applicants are tailoring their strategies to specific use cases. Some seek full-service national or state banking charters to offer a broad suite of retail and institutional services, while others opt for limited-purpose bank charters—such as industrial banks in Utah or trust bank licenses in New York—that permit niche activities like digital custody or stablecoin minting. This diversified approach reflects each firm’s core competency and risk appetite, balancing the rigorous approval processes against the operational benefits of an in‑house banking license.
2. Regulatory Winds Shift: FDIC, SEC, and the Trump Administration’s Pro‑Crypto Stance
The crypto‑to‑bank pipeline has benefited from a notable regulatory pivot in Washington. Since President Trump took office, his administration has signaled a willingness to foster fintech innovation, positioning the U.S. as a “bitcoin superpower” and explicitly encouraging banks to explore digital asset activities. In parallel, the FDIC issued guidance clarifying that federally supervised institutions may engage in certain crypto‑related activities without seeking prior explicit approval, provided they maintain robust risk management and compliance frameworks.
The Securities and Exchange Commission (SEC) has also tempered some proposals that crypto industry groups criticized as overly burdensome. In March 2025, Acting SEC Chairman Mark Uyeda indicated that the agency is likely to abandon a plan to require digital asset trading platforms to register as Alternative Trading Systems (ATS), a move that had alarmed many in the sector due to increased capital and reporting requirements. This retreat reassures market participants that regulators are calibrating oversight to support, rather than hinder, the growth of crypto infrastructure.
Collectively, these policy shifts have emboldened crypto firms to formalize their banking ambitions. The expectation is that, once chartered, these entities will face a clear, comprehensive supervisory regime under banking statutes—potentially reducing the legal uncertainty that has discouraged banks from servicing crypto clients.
3. Traditional Banks Re‑Enter the Crypto Arena
It is not only crypto‑native firms that are recalibrating toward digital assets; legacy institutions are also re‑evaluating their stance in response to evolving market dynamics. Reports on April 21, 2025, indicate that Deutsche Bank and Standard Chartered are exploring a deeper footprint in U.S. crypto services, leveraging their global banking franchises to provide custody, trading, and advisory services in the American market.
This resurgence follows a protracted period of caution, during which many global banks limited crypto exposure due to unclear rules and perceived risks. The incoming regulatory clarity in the U.S., coupled with the growing institutional demand for crypto solutions, has shifted the risk‑reward calculus. Deutsche Bank and Standard Chartered are reportedly analyzing market-entry strategies that range from white‑label custody offerings to direct trading desks, aiming to capture incremental fee revenue and defend client relationships.
Moreover, large banks are motivated by competitive pressures: European peers like Société Générale and BBVA have already launched crypto custody platforms under MiCAR frameworks, and U.S. incumbents such as BNY Mellon have rolled out digital asset custody services under state trust charters. To maintain parity, Deutsche Bank and Standard Chartered recognize that establishing or partnering for crypto infrastructure in the U.S. is increasingly table stakes.
4. Innovating Beyond Banking: New Products and Market Opportunities
While charter applications dominate headlines, many crypto firms are simultaneously racing to develop complementary offerings that capitalize on blockchain’s unique strengths. Circle, for instance, announced plans to launch a cross‑border payments network that leverages USDC rails to facilitate remittances and merchant settlement, aiming to rival established players like Mastercard and Visa in both speed and cost efficiency.
In the institutional sphere, BitGo is enhancing its multisignature custody solutions to support tokenized securities and decentralized finance (DeFi) protocols—targeting asset managers keen to explore blockchain‑native financial instruments under the umbrella of bank supervision. Likewise, Coinbase is iterating its borrowing and lending services, potentially integrating them with chartered bank deposit products to offer insured yields on digital asset collateral.
These product innovations reflect a broader industry trend: firms are seeking to bridge legacy finance and emerging blockchain use cases, from real‑time treasury management to programmable payments. A banking charter not only legitimizes their status but also unlocks on‑ramps to Federal Reserve tools—such as Fedwire and the upcoming FedNow real‑time payment service—enabling seamless interoperability between crypto rails and traditional payment networks.
5. Challenges Ahead: Compliance, Competition, and Technical Integration
Despite the momentum, aspiring crypto‑banks face substantial hurdles. The bank charter approval process remains rigorous and time‑consuming, requiring detailed examinations of capital adequacy, anti‑money laundering (AML) controls, cybersecurity resilience, and executive fitness. Applicants must also articulate clear business plans demonstrating how digital asset activities align with safe and sound banking practices, a nontrivial task given the novel risk profiles of blockchain assets.
Competition will intensify both among crypto‑native applicants and incumbent banks. As more entities vie for a limited number of charters, regulators may impose stricter scrutiny on overlapping proposals or demand proof of sustainable revenue models. Smaller fintech startups could be crowded out unless they partner with chartered sponsors or pursue niche state licenses.
Technical integration poses another layer of complexity. Building robust custody, settlement, and compliance infrastructure that interfaces with core banking systems—and ultimately with central bank payment networks—requires significant investment in both personnel and technology. Firms must ensure that their blockchain platforms can support institutional‑grade transaction volumes and adhere to the stringent operational‑risk standards applied to all banks.
Heralding a New Era of Finance
The wave of bank charter pursuits by crypto firms, combined with traditional banks’ renewed interest in digital assets, underscores a pivotal moment in financial evolution. Regulatory authorities have signaled a willingness to integrate blockchain innovation within established supervisory frameworks, and market participants are seizing the opportunity to redefine the contours of banking. As Circle, Coinbase, Paxos, BitGo, Deutsche Bank, and Standard Chartered—and likely more—navigate charter approvals, the stage is set for a convergence of crypto rails and fiat infrastructure.
The winners will be those who can adeptly manage compliance demands, engineer seamless technical solutions, and articulate compelling value propositions bridging two worlds. If successful, chartered crypto‑banks could offer customers insured deposit services, developer APIs for programmable money, and real‑time settlement capabilities that reshape cross‑border commerce and institutional finance. In doing so, the long‑anticipated “banking of blockchain” may finally become reality—a transformative milestone for both industries.
