Fintech and Crypto companies have actively pursued state and national banking licensing under President Donald Trump’s administration, with previously slow regulatory approval.
Industry executives have shown that companies seeking reliability and market expansion are seeing favorable landscapes under the administration, forcing regulators to transition from cautious attitudes to crypto, according to a Reuters report.
Increased interest in banking
New bank participants will increase industry competition and respond to niche market segments. Analysts and industry participants demonstrate that financial institutions launched by FinTech and Crypto companies can address underserved customer bases.
Additionally, legal experts working on bank charter applications will see an increase in profits.
Alexandra Steinberg Barrage, a partner at Troutman Pepper Locke, said companies remain cautiously optimistic as regulatory leadership resolves, but multiple applications are ongoing.
The report mentions two additional sources working in similar applications that observe a significant increase in discussions and preparatory work for the banking charter. However, the degree of follow-through remains uncertain.
When it comes to a licensed bank, it offers additional regulatory scrutiny, but offers strategic benefits. Banking licensing reduces borrowing costs, improves capital access and increases customer’s eyes.
Carlton Goss, a partner at Hanton Andrews Carse, highlighted his ability to reduce borrowing costs by drawing deposits as an important advantage. His company currently supports three such applications.
Improving the regulatory environment
Regulatory leaders set up by the Trump administration highlight financial technology innovation.
Travis Hill, acting chairman of the Federal Deposit Insurance Corporation (FDIC), recently said the agency is aiming to encourage more bank charter applications and maintain a stable pipeline of new entrants.
Crypto is particularly finding a more advantageous foundation in the US. hill Acknowledged the alleged efforts He criticised companies in this sector and called them “unacceptable.”
FDIC We will also modify the guidelines We propose an opening channel to allow banks to interact with crypto-related activities.
Federal Reserve Chair Jerome Powell, who, central bank regulators, helped improve the regulatory landscape. There is no intention Prevent banks from providing cryptographic services to fully legal customers.
Trump’s administration policies are generally expected to support business growth and encourage charter approval.
Nathan Stovall, director of financial institution research at S&P Global Market Intelligence, noted that previous regulatory trends based on Trump saw an increase in charter applications.
Competitive meaning
According to S&P Global, the number of new bank charters approved in the United States after the 2008 financial crisis fell sharply after the 2008 financial crisis.
Between 2010 and 2023, regulators approved only an average of five new charters per year, compared to 144 per year between 2000 and 2007.
The application has historically faced a long period of review and has been withdrawn some due to regulatory challenges and interest rate conditions that reduce profitability. Online financial platforms recognize that increasing regulatory scrutiny requires a proactive approach.
Goth said it makes sense for these platforms to preempt the curve, adding that securing a bank’s charter will improve reliability and reduce operational costs.
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