Financial technology and crypto firms are increasingly seeking bank charters to fuel their growth under what they perceive as a more industry-friendly Trump administration. With regulatory changes on the horizon, these firms aim to lower capital costs, gain legitimacy, and expand their market reach.

A Strategic Move for Crypto and Fintech

Historically, bank charters have been difficult to obtain, with approvals dwindling to just four in 2023. However, fintechs and crypto firms see a renewed opportunity under Trump’s deregulatory stance.

• A bank charter allows companies to reduce borrowing costs by using customer deposits instead of external funding.
• It also enhances credibility, making it easier to attract institutional investors and customers.
• Recent regulatory signals suggest a shift toward faster approvals for fintechs, boosting industry interest.

Trump’s Pro-Growth Policies Driving Interest

The Trump administration has installed new banking regulators who are prioritising innovation and competition. Experts believe this could streamline the historically slow and complex charter approval process.

• The Office of the Comptroller of the Currency (OCC) recently approved SmartBiz’s acquisition of Centrust Bank, marking the first fintech bank charter approval since 2021.
• FDIC Acting Chair Travis Hill has hinted at encouraging more firms to pursue charters.
• Federal Reserve Governor Michelle Bowman, nominated as Vice Chair for Supervision, has advocated for faster approvals.

These changes suggest a more open banking landscape, potentially benefiting fintechs and crypto companies eager to enter the sector.

Challenges Remain for New Applicants

Despite growing optimism, securing a bank charter remains an expensive and highly scrutinised process. Key hurdles include:

• High capital requirements – Setting up a bank typically requires $20 million to $50 million.
• Strict compliance regulations – Firms must adhere to anti-money laundering laws and the Bank Secrecy Act.
• Regulatory risks – Increased government oversight could impact crypto businesses that rely on decentralisation.

While the potential benefits of a bank charter are clear, the process remains lengthy and uncertain.

What’s Next for Crypto-Fintech Banking?

With over 4,500 banks in the U.S., experts predict mergers and acquisitions among regional lenders will reshape the industry.

For crypto firms, a bank charter could unlock mainstream adoption by blending decentralised finance with traditional banking. However, whether regulators maintain a pro-business stance or tighten rules remains to be seen.

For now, the race for bank charters signals a new phase of legitimacy and growth for fintech and crypto players navigating the evolving financial landscape.