U.S. Crypto Firms Seek Banking Licenses as Stablecoin Regulation Takes Shape

By Ayesha Aziz
April 21, 2025

Cryptocurrency companies in the United States are proactively engaging with traditional financial systems, with several firms applying for banking licenses amidst a backdrop of pending regulations governing stablecoins. Notable players in this movement include Circle, BitGo, Coinbase, and Paxos, each exploring various avenues to secure charters that would integrate them further into the banking framework.

Push for Banking Licenses

BitGo is making strides towards obtaining a full banking charter, which would empower the firm to offer a range of banking services including deposits and loans. The company currently manages reserves for USD1, a stablecoin that is backed by World Liberty Financial and supported in part by members of the Trump family. Circle, another prominent crypto entity, is intensifying its lobbying efforts as large traditional banks like Bank of America attempt to influence forthcoming legislation in ways that may favor conventional financial institutions over nonbank stablecoin issuers.

Coinbase and Paxos are also part of this movement, signaling a broader trend among cryptocurrency firms to achieve greater regulatory compliance and legitimacy in a landscape that is increasingly favoring established banking norms.

Legislative Framework for Stablecoins

The current landscape is shaped by two significant bills on the table. The STABLE Act, which has passed through the House Financial Services Committee and is receiving support from Republican lawmakers, proposes comprehensive federal oversight for stablecoin issuers. Key elements of the bill include requirements to separate reserve funds from corporate assets and a two-year prohibition on certain algorithmic stablecoins.

Simultaneously, the GENIUS Act is making headway in the Senate. This legislative proposal encourages the implementation of both federal and state regulatory frameworks, mandating that stablecoin issuers adhere to Anti-Money Laundering (AML) protocols and maintain liquidity standards. If enacted, the GENIUS Act would classify stablecoin issuers as financial institutions in accordance with the Bank Secrecy Act, imposing reporting obligations for suspicious activities and necessary customer verifications.

A Shifting Regulatory Environment

The Biden administration has shown an enhanced openness towards cryptocurrency companies, marking a significant shift from previous restrictions on banks engaging with the crypto sector. The Federal Reserve is set to release new guidance regarding crypto-related banking activities in the near future. Fed Chair Jerome Powell has acknowledged the importance of establishing clear legal frameworks for stablecoins, which have seen increasing utility in the broader economic landscape.

Currently, Anchorage Digital stands out as the only cryptocurrency firm to have obtained a federal bank charter, catering mainly to institutional clients. The firm is involved in notable lending endeavors, such as a $2 billion Bitcoin-backed loan alongside Cantor Fitzgerald and Copper, though it is also undergoing scrutiny from the Department of Homeland Security.

On the traditional banking side, institutions like Bank of America and U.S. Bancorp are beginning to explore crypto services through partnerships, while others maintain a cautious stance. International banks, including Deutsche Bank and Standard Chartered, are closely monitoring these developments as they contemplate potential entry into the U.S. cryptocurrency market.

The Role of Stablecoins

Stablecoins, particularly Tether and Circle’s USD Coin, play a vital role in the cryptocurrency ecosystem, being extensively used for payments and trading. As regulations evolve, cryptocurrency companies are strategically positioning themselves to meet enhanced regulatory expectations and achieve deeper integration into the financial system.

As these dynamics unfold, the intersection of traditional banking and cryptocurrency is set to become increasingly significant, potentially reshaping the future of finance in the United States.