On Mar. 18, 2025, Reuters reported that various crypto companies seek to become state or national banks, which they see as an avenue for expanding their businesses under the Trump Administration. What can change for crypto companies once they become banks? Don’t they already serve as banks? Aren’t banks increasingly embracing crypto?
Multi-faceted crypto platforms and banks have had overlapping functionality as many people can store their savings via crypto, grow capital using yield mining or staking, or get crypto loans. In regions with a high unbanked population that has smartphones, crypto platforms already occupy a bank-like position.
However, getting licensed as a state or national bank is different from just being a defacto bank-like entity. Let’s see what the prospects are for the crypto platforms seeking to become full-fledged banks. As the U.S. took a pro-crypto course, these companies have a bigger chance of transforming into banks. The modern-day regulators don’t see crypto as something utterly inadmissible. Reuters cites lawyers admitting that there is a rising interest from crypto companies that are cautiously seeking new opportunities.
SmartBiz acquired Centrust Bank, becoming the first fintech company to get a bank charter since 2021, indicating a possible trend setting.
Earlier this month, the Office of the Comptroller of the Currency reversed the banks’ anti-crypto stance, permitting banks to engage in cryptocurrency-related activity, including stablecoins operations, crypto custody, etc.
Why do some crypto platforms want to transform into banks?
First off, the companies hope to obtain bank status to boost their credibility. It may attract new individual and corporate clients, as banks seem more trustworthy and familiar to them than cryptocurrency ecosystems. It opens new opportunities and allows companies to scale up substantially. Bank charter is associated with additional scrutiny, but on the other hand, it gives companies a more legitimate image that is important for business expansion.
The second reason is that bank regulations pull crypto out of the grey zone, giving the companies a clearer legislative environment, thus providing a more predictable development trajectory and the opportunity to follow their strategies more confidently.
Another benefit of getting a bank charter is direct access to clients’ deposits. Without it, crypto companies have to borrow funds and pay high fees. With clients’ deposits, companies may be less constrained in their actions and development.
An intersection of banks and crypto platforms
Although blockchain has literally been antagonistic towards banks from day one (remember the message attached to the genesis block of Bitcoin), both banks and cryptocurrency businesses managed to co-exist and shape each other’s ways of operation. It seems that crypto no longer poses an existential threat to banks. Banks were adopting blockchain solutions, while crypto platforms adopted many of banks’ services, like loans and more basic operations like remittance.
Traditional banks use blockchain solutions for various reasons. Distributed ledger and smart contracts infrastructure allow banks to automate some processes and reduce costs, elevate compliance and overall security of funds and data, and increase settlement speed, especially when it comes to cross-border transactions. It’s worth saying that not only does automation make the services cheaper, but it also eliminates human errors and prevents fraudulent activity.
Such companies as JPMorgan Chase and Goldman Sachs use blockchain to streamline the Know Your Customer verification process. An international consortium of banks, Fnality International (it includes Barclays plc, HSBC Holdings, and other major banks), uses blockchain for cross-border transactions. These are only a few examples of many. CBDCs will reduce the intermediary engagement between citizens and central banks while not stopping commercial banks from providing services like crediting and others.
At the same time, cryptocurrency platforms were serving as banks in the rural unbanked areas with high mobile Internet penetration. Such areas can be found in Sub-Saharan Africa and some of the Asian regions. The residents of these areas mostly use crypto for remittance and savings.
The early 2020s saw the rise of neobanks, digital-first online banks that offer traditional banking services. The customer-centric approach and use of peer-to-peer solutions gave neobanks advantages over traditional banks. They charge lower fees, provide user-friendly apps, and usually have a more favorable approach to providing credits/loans to clients.
Most popular digital banks like Chime or Revolut account for tens of millions of clients. According to Plaid, over 21% of people aged between 21 and 56 were using neobanks as their primary checking account.
The adoption of cryptocurrencies was a logical step in the development of some of the neobanks. Revolut is a notable example of a neobank supporting cryptocurrency operations on top of other features like stock trading, currency exchange, and virtual cards.
We will likely see more crypto companies becoming banks in the future, as both the U.S. regulators and businesses express interest in such a development. Soon, we will learn if other countries are taking notes.
