Why crypto companies are rushing for bank charters

Multiple crypto companies have applied for national bank charters, with more expected on the way.Why it matters: Crypto companies are increasingly laying the plumbing for potentially huge new business lines as Washington readies new rules and regulations.Driving the news: The stablecoin company Circle, fresh off its $18 billion IPO, confirmed on Monday that it had applied with the Office of the Comptroller of the Currency (OCC) to establish a national trust bank, First National Digital Currency Bank, N.A.The cryptocurrency firm Ripple announced Wednesday that it too had also applied for a national banking license.And others are seeking approval too, including Fidelity's digital assets business.The big picture: The sudden rush comes as stablecoin legislation, which defines new requirements for issuers in the U.S., moves closer to President Trump's desk.Large issuers will need the imprimatur of the OCC to run a compliant dollar-backed stablecoin if Congress passes the GENIUS Act this year.A national charter would also smooth the path for digital asset firms to expand their business lines, setting them up to offer custody services, tokenized assets and payment infrastructures.Between the lines: National trust banks aren't traditional Main Street banks, and can't accept customer deposits or make loans.Circle said that, if approved, First National Digital Currency Bank would manage the reserve assets backing its stablecoin, USDC, and offer custody services to institutional customers.State of play: One crypto company has had such a charter since 2021: Anchorage Digital. It declined to comment on its stablecoin plans. Paxos, another stablecoin issuer, which oversees Paypal's PYUSD, sought a charter previously, but the application expired in 2023.Paxos declined to comment about whether or not it would renew its application. What we're watching: Banking groups.They have objected in the past to crypto firms seeking these charters.

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