According to a Reuters report dated March 18, industry insiders are allegedly saying that crypto firms see this as an opportunity to gain regulatory legitimacy and broaden their markets. Though such applications have historically taken regulatory bodies a long time to approve, legal experts have seen a recent uptick in interest.
“We have seen a lot more interest. We are working on several applications now,” said Alexandra Steinberg Barrage, a partner at the law firm Troutman Pepper Locke, as quoted by Reuters. However, with the administration appointing new banking regulators, Locke said, many firms are feeling cautiously optimistic, even as enthusiasm builds.
National bank status would enable crypto firms to lower borrowing costs by accessing deposits, enhancing credibility, and creating new business opportunities. “It makes sense for them to get ahead of the curve and gain credibility and capital at a lower cost by applying for a charter,” told Carleton Goss, a partner at Hunton Andrews Kurth, to Reuters.
The report also said that approvals for bank charters have historically been few and far between, with U.S. regulators granting just four in 2023. For the years between 2010 and 2023, however, the average approvals per year were only five, in stark contrast to the 144 approvals between 2000 and 2007. Thus, obtaining charters will be difficult for the crypto enterprises entering the banking sector.
Following the news, many crypto industry netizens are unhappy about this move.
One X user, who goes by the username Cedric Beau said, “Bitcoin doesn’t need banks. Any crypto company trying to become a national bank isn’t decentralizing; it’s integrating into the same system $BTC was built to replace.”
Another user named MooseyB17 said, “NO! The whole point of crypto is to get away from banks.”
However, many within the crypto community believe this could help in adopting cryptocurrencies, saying, “Regulatory clarity incoming? This could be a game changer for Bitcoin and crypto adoption.”
