Four leading cryptocurrency companies are actively seeking banking licenses in a strategic move to integrate digital assets with traditional financial systems, as reported by The Wall Street Journal.
According to the report, CIRCLE, the issuer of the USDC stablecoin, and BITGO, a prominent digital asset custody firm, are pursuing federal bank charters. These charters would enable them to operate as conventional lending institutions, offering deposit services and loans. Additionally, COINBASE and PAXOS are exploring similar initiatives, signaling a broader trend of crypto-native firms seeking regulatory legitimacy within the traditional banking sector.
Currently, ANCHORAGE DIGITAL remains the only crypto-native company holding a federal bank charter, underscoring the significant regulatory hurdles facing digital asset firms. In 2022, the Office of the Comptroller of the Currency (OCC) ordered ANCHORAGE DIGITAL to enhance its controls related to client due diligence, suspicious activity monitoring, and anti-money-laundering measures.
Last week, Barron’s reported that the U.S. Department of Homeland Security’s El Dorado Task Force, which focuses on combating financial crimes, contacted employees of ANCHORAGE DIGITAL BANK to inquire about its practices and policies. The specific reasons for the probe remain unclear, though the report cited anonymous sources familiar with the inquiry.
NATHAN MCCAULEY, CEO of ANCHORAGE DIGITAL, emphasized the challenges of navigating federal regulations, stating: “It has not been easy… [the] whole gamut of regulatory and compliance obligations that banks have can be intertwined with the crypto industry.”
These developments highlight the growing efforts by cryptocurrency firms to align with traditional financial systems while managing the complexities of regulatory compliance.
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Sources: The Wall Street Journal, Barron’s