Encryption companies seize opportunities in the US banking industry due to favourable information from policies

Recently, several cryptocurrency companies are actively seeking to enter the traditional banking sector in the United States. They hope to further integrate into the mainstream financial system by taking advantage of the current relatively relaxed regulatory environment.

Some well-known encryption companies such as Ripple, Circle, and BitGo have applied for national trust bank licenses, which will allow them to provide certain banking services. Meanwhile, a certain cryptocurrency trading platform plans to launch card services next month.

The co-CEO of the trading platform stated that this is a natural integration process, and the company expects to launch debit and credit card services around the end of this month.

These actions highlight that cryptocurrency companies are seeking to expand their business scope, no longer limited to simply providing digital asset services. Due to the current government's open attitude towards digital assets, industry executives' confidence has greatly increased.

Circle, based in New York, stated that obtaining a national bank trust license from the Office of the Comptroller of the Currency, which regulates financial institutions, will be an important step in integrating digital assets into the broader financial system. Currently, Anchorage Digital is the only cryptocurrency company that holds a national bank license.

Max Bonich, a partner at Davis Wright Tremaine LLP, pointed out that this is completely contrary to the original理念 of many cryptocurrency companies. They once claimed to be above all, without the need for banks and law, but are now requesting to be regulated.

Although national trust banks can custody assets and process payments, they cannot provide loans or directly accept customer deposits. Obtaining national trust status will exempt companies from the need to obtain licenses separately from each state and improve their access to the financial system.

Before discussing stablecoin legislation in Washington, cryptocurrency companies are accelerating their entry into the banking industry. This legislation will bring stablecoins closer to the traditional financial system. Pillsbury partner Adam Chernyshov believes this will open up the U.S. financial markets and essentially allow the emergence of stablecoins.

Stablecoins track the prices of currencies such as the US dollar and are increasingly becoming mainstream. Traders use them to trade between sovereign currencies and encryption, while others use them for cross-border payments.

The proposed legislation will strengthen the regulation of stablecoins and tie them more closely to U.S. Treasury securities. Only regulated banks and certain non-bank groups licensed by the OCC will be able to issue stablecoins.

Ripple CEO Brad Garlinghouse stated that the company has also applied for a master account with the Federal Reserve, which would allow it to hold stablecoin reserves directly at the central bank.

The connection between digital banking and encryption is becoming increasingly close, and fintech companies are increasingly seeking to leverage the rapidly growing encryption assets to attract American customers.

A retail brokerage firm generated more than half of its trading revenue from cryptocurrency last year and plans to launch some banking services in the fall. Its CEO stated that the company should be able to meet all of its clients' financial needs, including tax, estate planning, and fund transfers.

A large portion of the income of a new type of bank headquartered in London also comes from cryptocurrency trading, and the company's long-term goal is to obtain a U.S. banking license. The CEO of another consumer lending company plans to add encryption to the company's products.

At the same time, large banks including Bank of America are seeking to issue their own stablecoins after the finalization of regulations in the United States.

David Portilla, a partner in the financial services department of Davis Polk, stated that the current government has indicated that they will open the charter application process in ways that previous administrations did not.

However, not all cryptocurrency companies diversifying into traditional consumer banking believe they need to apply for a banking license. A certain cryptocurrency exchange platform licensed in Wyoming is launching its new application without the need to apply for a license or a primary trust.

The platform's co-CEO stated that they do not want to be a bank providing loans, but rather want to collaborate with partners who can offer the best service.