On March 18, 2025, it was reported that several cryptocurrency firms are aiming to transform into state or national banks, viewing this as a pathway for business growth under the Trump Administration. What changes might occur for these crypto companies if they attain bank status? Aren’t they already functioning as banks? Are banks not increasingly welcoming cryptocurrency?
Comprehensive crypto platforms and banks exhibit overlapping functions, allowing individuals to store their savings in cryptocurrencies, enhance their capital through yield mining or staking, or secure crypto loans. In areas with a large number of unbanked individuals possessing smartphones, crypto platforms already play a role similar to that of banks.
However, obtaining a license as a state or national bank is distinct from merely acting as a bank-like establishment. Let’s explore the future prospects for crypto platforms aiming to evolve into fully operational banks. As the U.S. embraces a pro-crypto stance, these companies have increased opportunities to transition into banking institutions. Modern regulators do not view cryptocurrency as entirely unacceptable. Legal experts have noted a growing interest from crypto firms cautiously exploring new avenues.
A fintech company recently acquired Centrust Bank, making history as the first fintech entity to receive a bank charter since 2021, signaling a potential trend.
Earlier this month, the Office of the Comptroller of the Currency reversed its anti-crypto policies, allowing banks to engage in activities related to cryptocurrencies, including stablecoin operations and crypto custody.
Why are some crypto platforms pursuing bank status?
To begin with, firms seek bank status to enhance their credibility. This could attract a new wave of individual and corporate clients, as banks are often regarded as more trustworthy and familiar compared to cryptocurrency ecosystems. Achieving bank status creates new opportunities and allows for substantial scaling. While a bank charter involves increased scrutiny, it also confers a more legitimate image, crucial for business expansion.
Secondly, bank regulations help clarify the legal parameters surrounding cryptocurrencies, moving them out of the gray area. This shift provides companies with a more predictable operational framework and the ability to pursue their strategies with greater confidence.
Another advantage of acquiring a bank charter is the direct access to client deposits. Without this, crypto firms must rely on borrowing funds and incur high fees. With direct access to deposits, these companies could operate with greater freedom and flexibility in their development.
The intersection of banks and crypto platforms
Although blockchain technology has historically positioned itself in opposition to traditional banking (notably referenced in the message included in Bitcoin’s genesis block), both banks and cryptocurrency enterprises have managed to coexist and adapt to one another. The notion that crypto presents an existential threat to banks is diminishing. Financial institutions are now adopting blockchain innovations, while crypto companies have incorporated several banking services, such as loans and remittance options.
Traditional banks leverage blockchain technology for various purposes. The use of distributed ledgers and smart contracts enables banks to automate processes, reduce costs, improve compliance, enhance the security of funds and data, and accelerate transaction speeds, particularly for cross-border exchanges. Notably, automation not only reduces service costs but also minimizes human error and mitigates the risk of fraud.
Institutions like JPMorgan Chase and Goldman Sachs have adopted blockchain to streamline their Know Your Customer verification processes. An international consortium of banks, known as Fnality International—which includes major players like Barclays plc and HSBC Holdings—utilizes blockchain for cross-border transactions. These examples highlight a broader trend within the industry.
Meanwhile, cryptocurrency platforms have acted as banks in rural areas with high mobile internet connectivity, such as Sub-Saharan Africa and certain regions in Asia. Residents in these locales primarily utilize crypto for remittance services and savings.
The early 2020s marked the rise of neobanks—digitally focused banks that offer traditional banking services. By prioritizing customer experience and implementing peer-to-peer solutions, neobanks have gained advantages over conventional banks, including lower fees, more user-friendly apps, and flexible lending practices.
Popular digital banks, including Chime and Revolut, boast tens of millions of customers. According to data from Plaid, over 21% of individuals aged 21 to 56 have switched to neobanks for their primary checking accounts.
The integration of cryptocurrencies into their offerings has been a natural progression for some neobanks. Revolut, for instance, exemplifies a neobank that supports cryptocurrency transactions in conjunction with features like stock trading, currency exchange, and virtual cards.
Looking ahead, it’s likely that more crypto companies will pursue banking status, as U.S. regulators and industry players demonstrate interest in this evolution. It will be interesting to see if other nations follow suit.